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S corporations have more restrictive ownership requirements than other entities?
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Sole proprietors are subject to self-employment taxes on net income from their sole proprietorship
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Taxation Topic !

Types of Entities

QuestionAnswer
S corporations have more restrictive ownership requirements than other entities? True
Sole proprietors are subject to self-employment taxes on net income from their sole proprietorship True
Shareholders of C corporations receiving property distributions must recognize dividend income equal to the fair market of the distributed property if the distributing corp has sufficient earnings and profits True
The deduction for qualified business income applies to owners of flow-through entity owners. True not corps
The C corporation tax rate is significantly lower than the top individual marginal tax rate. true
Owners who work for entities taxed as a partnership receive guaranteed payments as compensation. The guaranteed payments are not self-employment income False they are self-employment income
If a C corporation incurs a net operating loss in 2018 it may carry the loss back two years and forward 20 years to offset income in those years. False that was old tax code pre 2018. New law you cannot cover previous years at all but can carry forward forever
The deduction for qualified business income applies to business income to an owner from all but corporations
Can a c corporation who incurs a net operating loss (NOL) for a tax year that begins in 2018 do? It may not carry the NOL back but can carry forward loss indefinitely
What kind of deduction is the deduction for qualified business income? A from AGI deduction that is not an itemized deduction
When an employee/shareholder receives a business income allocation from a S corp what taxes apply to the business income allocation? regular taxes ( like a dividend shareholder taxed)
From a tax perspective, which of the following entity choices would not allow you to offset the entity losses against your income from other sources.? C Corp
A C corp's losses must be used at the entity level. That is the losses don't flow-through to owners to offset their income from other sources.
From a tax perspective, which entity choice is preferred when a liquidating distribution occurs and the entity has appreciated assets partnership
What is the maximum number of unrelated shareholders a C corp, S corp and maximum number of partners a partnership can have no limit corp, 100 max S and no limit partnership
On which tax form do LLC's with more than one owner generally report their income and losses? 1065
What documents must LLCs file with the state to organize their business. Articles of organization
Which legal entity provides the least flexible legal arrangement for owners? Corporation
Which of the following legal entities file documents with the state to be formally recognized by the state? LLC
What describes the marginal tax rate The tax rate applied to the next additional increment of a taxpayer's taxable income (or deduction).
Corporations with annual average gross receipts exceeding $25 million over the prior three years are required to use the accrual method True
A corporation may not use the cash method of accounting in the second year if it reported more than $25 million in gross receipts in the first year. true
Any Book tax difference that requires an add-back to book income to compute taxable income is an unfavorable book-tax difference because it requires an adjustment that increases taxable income relative to book income.
Income that is included in book income , but excluded from taxable income results in a favorable, permanent book-tax difference .
For a corporation , goodwill created in an asset acquisition generally? leads to temporary book-tax differences.
For tax purposes a corporation may deduct the entire amount of a net capital loss? In the year incurred.
Created by: smcdo11
 

 



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