Originally Posted by High Seas  ....Any idea how tax liability changes from one year to next when you change the name?.... |
It depends on what jurisdiction you fall under; your ID suggests you are mobile.
Very likely what you will find it that when you transfer business assets from a Sole Proprietorship to a Limited Liability Company the tax people take the view that you have 'sold' them to the LLC. This means that you, the Sole Proprietor, have to include this theoretical income in your personal income for tax purposes in the year of the transition.
You have to be careful how you value the proprietorship because of course if you value it high you finish up paying more tax, but if you value it low the tax people may come back and give it an imputed value which is way higher than is realistic.
If you own some valuable machines or have designs that have a future value you may need to consult with a tax advisor to make sure you do things correctly. Sometimes it is best for you personally to retain ownership of these things and lease or license them to the LLC.
At the very least do the transition at the beginning of a tax year so the transfer value does not add onto a full year's income from the proprietorship.