Question

________(1) ________________​entities, such as ____(2) _________________________________are required to pay income taxes on their taxable income. ___(3) __________entities, such as __(4)___________generally do not directly pay income taxes on their taxable income but merely pass the income on to a____(5)______entity.

1. (a). Taxpaying (2. a.) individual and c corporation 3a. flow-though 4a. individual and c corporation 5a. flow through

1 (b). flow-through (2b). individual and s corporation 3b. tax paying 4b. individual and s corporation 5b.taxpaying

2c. sole propritorships, c corporatipon and certain trusts 4c. sole propritorships, c corporatipon and certain trusts

2d. sole proprietorships, s corporation, llcs llps and certain trust. 4d. sole proprietorships, s corporation, llcs llps and certain trust.

Answer 1

(1) - (a) Taxpaying entities

(2) - (a) individual and c corporation

(3) - (a) Flow through

(4) - (d) sole proprietorship, S corporation, llc's, llp's and certain trusts

(5) - (b) tax paying

Explaination- Congress has provided that only certain entities are resposible for actually paying the tax. According to the code, individuals, most corporations, and fiduciaries are taxable entities. Other entities such as sole proprietorships, partnerships and S corporations are not required to pay any tax on their income. Instead, these entities are required to allocate their taxable income to their owners who bear the responsibility for paying any tax that may be due.