Business organization Chart

Question 1

Business Organization Chart
- Business is Profitable

Answer 1

C Corporation keys
1. Separate tax entity
2. Dividend-received deduction

Personal Service Corporation (PSC)
(Flat tax at 21%)

Question 2

Business Organization Chart
- Business Has Losses
- Risk-free entity

Answer 2

Sole Proprietorship keys
1. Pension plan (Keogh)
2. 100% of medical, dental, & LTC insurance deductible for owner
3. Lack of continuity

Partnership keys
1. Pension plan (Keogh)
2. 100% of medical, dental, & LTC insurance deductible for owner
3. Lack of continuity
4. Losses up to basis

Question 3

Business Organization Chart
- Business Has Losses
- Risky entity (needs limited liability)

Answer 3

S-Corporation keys
1. Pension plan
2. 100% of medical, dental, & LTC insurance deductible for ≥ 2%
owner
3. Losses up to basis
4. Special requirements
- no more than 100 shareholders
- only one class of stock- No Preferred
- must be a domestic corporation
- Shareholders must be U.S. citizens or residents.
- All shareholders must consent to the election.

Limited Liability Company keys
1. Limited liability (like a corporation)
2. Losses up to basis (like a partnership)

Limited Partnership keys
1. Limited partners cannot actively participate in business.
2. Losses up to basis