How are Beehive Homes' taxable income and credits handled for federal income tax purposes?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
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Income Taxes
The Company elected, with the consent of its shareholder, to be taxed under the provisions of Subchapter S of the Internal Revenue Code. In lieu of corporation income taxes, taxable income and credits are allocated to the shareholder of the Company for inclusion in their personal income tax returns. Accordingly, no provision or liability for federal income tax is included in the accompanying financial statements.
The Company has elected to pay an elective tax in the amount of 6.5% to the state of Idaho. The Company has determined that such payments meet the criteria of a shareholder distribution under ASC 740. Accordingly, no provision or liability for state income tax is included in these financial statements.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to the 2025 Beehive Homes Franchise Disclosure Document, Beehive Homes has elected to be taxed as an S Corporation. This means that Beehive Homes itself does not pay federal income taxes at the corporate level. Instead, the company's taxable income and credits are allocated to its shareholder, who then includes these items on their personal income tax returns. Therefore, no provision or liability for federal income tax is included in the company's financial statements.
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, which is not recognized by the company.
For prospective Beehive Homes franchisees, this information is relevant on the corporate level, not the franchisee level. This information is more pertinent to investors or those interested in the overall financial structure of Beehive Homes as a franchise company. Franchisees should consult with their own tax advisors to understand the tax implications of operating a Beehive Homes franchise for their individual circumstances.