Question

1. Which of the following is not generally a factor in business entity selection?

		Ease of formation
		Limited liability protection
		Nature of business
		Pass-through taxation

5 points   

QUESTION 2

1. Individual proprietors report their business income and deductions on:

		Form 1065
		Form 1120S
		Schedule A
		Schedule C

5 points   

QUESTION 3

1. The built-in gain tax is a corporate level tax that applies to:

		"S" Corporations that convert to limited liability companies
		"C" Corporations that convert to "S" Corporations
		"C" Corporations that convert to a partnership
		"S" Corporations that convert to "C" corporations

5 points   

QUESTION 4

1. When preparing tax forms, how much of a corporation's net capital loss of $10,000 can be keyed into the software to directly offset ordinary income if there are 3 shareholders?

		$0
		$3,333
		$6,000
		$10,000

Answer 1

Q1

Pass-through

taxation

Reason

Reason is simple easy of formation, limited liability protection. While selecting company fore most factor we have to consider easy formation and nature of business. If company is limited liability it will protect us from liabilities. Tax is last thing if we have profits we gone to pay if not no need.

Q2

Reporting Self-Employment Business Income and Deductions

Self-employed taxpayers report their business income and expenses on Schedule C.

Q3

In general, the built-in gains tax is a special tax imposed on an S corporation that was previously a C corporation

Q4

0 corporate tax can only allowed to carry forward and set off when ever business earn profit it will not setoff income of share holders.