Does Beehive Homes recognize the deferred tax liability for the shareholder?

According to Beehive Homes' 2025 Franchise Disclosure Document, Beehive Homes does not recognize the deferred tax liability for its shareholder. The company has elected to be taxed as an S Corporation, meaning that the income for 2024, 2023, and 2022 will be taxed to the shareholder as an individual, not to the corporation itself.

Beehive Homes uses accelerated depreciation for income tax reporting, and there are additional timing differences due to various tax positions taken by the company. These differences in accounting treatments between the financial statements and the company's tax return result in a deferred tax liability for the shareholder as an individual. However, this liability is not recognized by Beehive Homes on its own financial statements.

This means that while the shareholder is responsible for paying income taxes on the company's earnings, Beehive Homes does not account for this future tax obligation as a liability on its balance sheet. Prospective franchisees should consult with a financial advisor to understand the tax implications of investing in an S Corporation and how this deferred tax liability may affect their personal tax situation.