Corporate and Partnership Taxes

Question 1

Formation of Corporation/Partnership

Answer 1

Generally a non-recognition transaction

Question 2

Carry Over Basis

Answer 2

The contributing owner receives no gain.

Question 3

C-Corp

Answer 3

Taxed twice, when it has taxable income AND when paying dividends

Question 4

S-Corp

Answer 4

Pass thru tax, (business is not taxed)

Qualifications, cannot have more than 100 shareholders, cannot have preferred stock, only retain types of trust can be shareholders.

Question 5

Partnerships

Answer 5

Pass-Thru Tax

Each partners must report every year his pro rata share of partnership income and pay tax on that share (business is not taxed)