Business Entities

Question 1

What tax form does a partnership file?

Answer 1

Form 1065

Question 2

Who are the members in a qualified joint venture?

Answer 2

Spouses

Question 3

Are you allowed to use qualified joint venture status if you organize a multi-member LLC?

Answer 3

No

Question 4

Do partners receive a W-2?

Answer 4

No

Question 5

When is Form 1065 due?

Answer 5

By the 15th day of the third month following fiscal year-end.

Question 6

Who is a qualified farmer?

Answer 6

One who earns at least 2/3 of their income from farming activity in 2022 or 2023.

Question 7

What are the requirements to be an S-Corp?

Answer 7

1. Must be domestic
2. Shareholders aren’t partnerships, corporations, or non-residents.
3. No more than 100 shareholders
4. Only one class of stock
5. Not an ineligible corporation

Question 8

What form is filed to elect S-Corp status?

Answer 8

Form 2553

Question 9

When must a taxpayer adopt a calendar year? (If any apply)

Answer 9

1. Keeps no books/records
2. No annual accounting period
3. Present year doesn’t qualify as fiscal year
4. Otherwise required by IRC

Question 10

What form is filed to request a change in accounting method?

Answer 10

Form 3115

Question 11

What tax form does a C Corporation file?

Answer 11

Form 1120

Question 12

When is Form 1120 due?

Answer 12

By the 15th day of the fourth month following fiscal year-end.

Question 13

What tax form does an S Corporation file?

Answer 13

Form 1120S

Question 14

Do S Corporation owners receive a K-1?

Answer 14

Yes

Question 15

What qualifies as a closely held corporation?

Answer 15

1. Not a personal service corporation
2. Any time during the last half of tax year, more than 50% of outstanding common stock was owned by 5 or fewer individuals.

Question 16

When must a corporation pay its tax due in full?

Answer 16

No later than the 15th day of the third month following fiscal year-end.

Question 17

What is the penalty for failure to file a timely corporate tax return?

Answer 17

5% per month, subject to a maximum of 25%

Question 18

What is the penalty for failure to pay corporate tax when due?

Answer 18

0.50% per month, subject to a maximum of 25%

Question 19

To be a qualified dividend, these 3 conditions must be met:

Answer 19

1. Paid by a US Corporation
2. Aren’t explicitly a non-qualified dividend
3. Taxpayer meets holding period

Question 20

What is the holding period for determining qualified dividends?

Answer 20

The taxpayer must hold the stock for more than 60 days during the 121 period that begins 60 days before the ex-dividend date.

Question 21

When are estimated payments due for a corporation?

Answer 21

On the 15th day of the 4th, 6th, 9th, and 12th month of their tax year.

Question 22

What are the two methods for calculating estimated quarterly tax payments for a corporation?

Answer 22

Use the smaller of

1. 25% of estimated tax this year
2. 25% of actual tax last year

Question 23

When is Form 1120S due?

Answer 23

By the 15th day of the third month following fiscal year-end.

Question 24

Can section 179 depreciation be used by the corporation?

Answer 24

No, this is passed through to the individual shareholder

Question 25

If a corporation owns less than 20% of another corporation, what percentage of dividends received are deductible?

Answer 25

50%

Question 26

If a corporation owns 20% or more of another corporation, what percentage of dividends received are deductible?

Answer 26

65%

Question 27

What are homeowner’s associations’ tax rates if they file on Form 1120-H?

Answer 27

1. 30% if condominiums or residential
2. 32% for timeshares