ENT Chapter 9.2

may have tax advantages depending on the state in which the business operates

An advantage of a limited liability company (LLC) over an S corporation is that an LLC Blank______.

capital gains or losses from the S corporation are considered personal income or losses by the shareholders on a pro rata basis

An advantage of an S corporation over a C corporation is that

They lack control over business decisions.

Identify a true statement about limited partners in a general partnership.

It is separated based on the types of business decisions.

Identify a true statement about management control in a corporation.

They are paid in the form of guaranteed payments without involving any federal or state withholding.

Identify an attribute of the owners of a limited liability company (LLC).

It can be formed by one or more individuals, corporations, partnerships, trusts, or other entities. Its members are allowed to share income, profit, expense, deduction, loss and credit, and equity among themselves.

Identify the advantages of a limited liability company (LLC) over an S corporation. (Check all that apply.)

Its members are allowed to share income, profit, expense, deduction, loss and credit, and equity among themselves. It can be formed by one or more individuals, corporations, partnerships, trusts, or other entities.

Identify the advantages of a limited liability company (LLC) over an S corporation. (Check all that apply.)

An S corporation is not subjected to a minimum tax, as is a C corporation. Shareholders in an S corporation retain the same limited liability protection as a C corporation.

Identify the advantages of an S corporation over a C corporation. (Check all that apply.)

For service-based businesses, the 20 percent deduction is only applicable to income after salary. For employee-driven, passed through businesses such as restaurants and manufacturers, the tax deduction of 20 percent is limited to 50 percent of the company's payroll.

Identify the true statements about the tax rates for various forms of business after the new laws passed at the end of 2017. (Check all that apply.)

False

True or false: A proprietorship is likely to require a larger sum of capital than the capital needed for a partnership or corporation.

True

True or false: In a partnership, the distribution of profits and losses is based on the partnership agreement.

True

True or false: It is mandatory for the members of a limited liability company (LLC) to file estimated taxes on a regular basis.

It results in no dividends to stockholders.

What is the implication of losses incurred by a corporation?

He or she is not considered a limited partner. He or she assumes personal liability.

Which of the following are true when a limited partner in a general partnership is given some control over business decisions? (Check all that apply.)

The acceptance of limited liability companies (LLCs) in all states

Which of the following has been the reason for the decline in the growth rate of the formation of S corporations in the last few years in the United States?

An LLC is similar to an S corporation. Currently, regulations allow an LLC to be automatically taxed as a partnership.

Which of the following is true about limited liability companies (LLCs)?

All C Corporations receive a tax cut from 35 percent to 21 percent. Pass through businesses receive 20 percent reduction of their business income.

Which of the following statements are true about the tax rates for various forms of business after the new tax laws passed at the end of 2017? (Check all that apply.)