Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Test your recall > ITX - 35A > Flashcards

ITX - 35A Flashcards

1
Q

Business Form: Owners’ Liability - Unlimited personal liability

A

Sole Proprietor

Partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Business Form: Owners’ Liability - Unlimited personal liability, including liability for the acts of partners

A

Partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Business Form: Owners’ Liability - Limited personal liability

A

Business Form:
S Corporation
Limited Liability Company
C Corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Business Form: Organization Costs - None needed except for possible local licensing

A

Sole Proprietor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Business Form: Organization Costs - No formal agreement is required unless it is a limited ___. A written agreement is recommended

A

Business Form: Partnership

Partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Business Form: Organization Costs - Organized like a regular corporation and filed with the state. Election must be signed by all shareholders and filed with the IRS.

A

S Corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Business Form: Organization Costs - Articles of Organization must be filed with the state. Governed by state law.

A

LLC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Business Form: Organization Costs - Articles of Incorporation must be filed with the state, which will require a payment of fees. Legal assistance may be required.

A

C Corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Business Form: Management - Sole owner makes the decisions

A

Sole Proprietorship

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Business Form: Management - Decisions are made according to the ___ agreement - in the absence of one, partners vote according to their share of profits.

A

Business Form: Partnership

- Partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Business Form: Management - Shareholders elect the board of directors, who, in turn, appoint management to make day-to-day decisions. Shareholders should ratify major decisions.

A

Business Form:
S Corporation
C Corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Business Form: Management - The owners, called members, choose managers according to the organizational agreement.

A

LLC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Business Form: Taxation of Owners - All net income from the ___ is subject to income tax and self-employment tax, whether or not received by the owner.

A

Business Form: Sole Proprietorship

- Sole Proprietorship

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Business Form: Taxation of Owners - All net income of the ___ is allocated to the partners, according to the ___ agreement. It is self-employment income for ___ partners, but not for ___ partners.

A

Business Form: Partnership

  • Partnership
  • Partnership
  • General
  • Limited
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Business Form: Taxation of Owners - Owners can be employees of the corporation and receive salary that is taxable to the ___ and deductible to the ___. Net income is allocated to the shareholders according to their ___ and is not subject to ___ tax.

A

Business Form: S Corporation

  • Recipient
  • Corporation
  • stock ownership
  • self-employment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Business Form: Taxation of Owners - Members are taxed the same way as partners, if that option is chosen.

A

LLC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Business Form: Taxation of Owners - Owners can be employees and receive taxable income as salary, which is ___ by the corporation. Net income from the corporation is taxed at the ___ level. Shareholders are taxed ___ on dividends received.

A

Business Form: C Corporation

  • Deductible
  • Corporate
  • Separately
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Business Form: Losses - May offset losses against income from other sources, up to the amount at risk

A

Sole Proprietor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Business Form: Losses - A ___ partner who actively participates in the business may deduct losses up to his or her basis against other income. For ___ partners, losses are passive.

A

Business Form: Partnership

  • General
  • Limited
20
Q

Business Form: Losses - An active shareholder is treated like a ___ partner and may deduct his or her share of losses against other income.

A

Business Form: S Corporation

- General

21
Q

Business Form: Losses - An active member is treated like a ___ partner.

A

Business Form: LLC

- General

22
Q

Business Form: Losses - Losses may be carried back 2 years and forward 20 years to offset other income, but have no effect on shareholders.

A

C Corporation

23
Q

Business Form: Basis/Amount at Risk - All assets personally committed to the business make up basis.

A

Sole Proprietor

24
Q

Business Form: Basis/Amount at Risk - A ___ partner has a basis in his or her ___ share equal to the amount paid, plus/minus his or her share of the income (or loss) from the ___, less any withdrawals, plus his or her share of ___ liabilities.

A

Business Form: Partnership

  • General
  • Partnership
  • Partnership
  • Partnership
25
Q

Business Form: Basis/Amount at Risk - A shareholder’s basis is the amount paid plus/minus his or her share of income/loss from the corporation, less withdrawals. ___ loans to the corporation are added to basis, but not loans taken by the ___.

A

Business Form: S Corporation

  • Shareholder
  • S Corporation
26
Q

Business Form: Basis/Amount at Risk - An active member is treated like a ___ partner, and a passive member is treated like a ___ partner. Active members’ basis increases for loans to the ___ by the members, as well as for loans taken by the ___.

A

Business Form: LLC

  • General
  • Limited
  • LLC
  • LLC
27
Q

Business Form: Basis/Amount at Risk - A shareholder’s basis is the purchase price. Return of capital reduces basis. Reinvesting dividends increases basis. Basis is allocated to additional shares in a stock split or stock dividend.

A

C Corporation

28
Q

Business Form: Retirement Plans - Most plans are available. Contribution limits are calculated on net self-employment income and are deductible on page 1 of Form 1040, not as a business expense.

A

Business Form:
Sole Proprietor
Partnership
LLC

29
Q

Business Form: Retirement Plans - Includes guaranteed payments

A

Partnerships

30
Q

Business Form: Retirement Plans - Most plans are available. Owners must be employees to participate, and contributions for owners are calculated as for other employees.

A

Business Form:
S Corporation
C Corporation

31
Q

Business Form: Employee/Owner Benefits - Health insurance premiums are 100% deductible. Life insurance premiums on the owner are income to the owner.

A

Business Form:
Sole Proprietor
Partnership
LLC

32
Q

Business Form: Employee/Owner Benefits - Employee benefits are nontaxable only for the employees who own less than 2% of stock.

A

S Corporation

33
Q

Business Form: Employee/Owner Benefits - Owner/employees can be provided with health, disability, and group term life (up to $50,000) with no taxable income to the owner/employee.

A

C Corporation

34
Q

Business Form: Restriction on Owners - None

A 
Business Form:
Sole Proprietor
Partnership
LLC
C Corporation
35
Q

Business Form: Restriction on Owners - Up to 100 shareholders that are domestic individuals, estates, or certain trusts.

A

S Corporation

36
Q

Business Form: Transfer of Ownership - Sale of assets only

A

Sole Proprietor

37
Q

Business Form: Transfer of Ownership - ___ agreement should govern how transfer takes place and who must approve it. The seller reports a gain on the difference between the sale price and basis, with special allocation to ___.

A

Business Form: Partnership

  • Partnership
  • Inventory and receivables
38
Q

Business Form: Transfer of Ownership - Ownership can be transferred by a simple sale of stock. Bylaws may restrict sales to ensure compliance.

A

Business Form:
S Corporation
C Corporation

39
Q

Business Form: Transfer of Ownership - The operating agreement should do the same as a partnership agreement.

A

LLC

40
Q

Business Form: Risk Protection - None. The owner is liable for all losses; the owner should avoid risky activity and/or should insure.

A

Business Form:
Sole Proprietor
Partnership

41
Q

Business Form: Risk Protection - Owners have limited liability, so they can engage in risky activity

A

Business Form:
S Corporation
LLC
C Corporation

42
Q

Basis/Amount at Risk: Partnership - A general partner has a basis in his or her partnership share equal to the amount ___, plus/minus his or her share of the ___ from the partnership, less any ___, plus his or her share of ___.

A
  • paid
  • income (or loss)
  • withdrawals
  • partnership liabilities
43
Q

Basis/Amount at Risk: S Corporation - A shareholder’s basis is the amount ___ plus/minus his or her share of ___ from the corporation, less ___. Shareholder loans to the corporation are ___ to basis, but not loans taken by the S corporation.

A
  • paid
  • income/loss
  • withdrawals
  • added
44
Q

Basis/Amount at Risk: LLC - Active members’ basis ___ for loans to the LLC by the members, as well as loans taken by the LLC.

A

increases

45
Q

Basis/Amount at Risk: C Corporation - A shareholder’s basis is the ___. Return of capital ___ basis. Reinvesting dividends ___ basis. Basis is allocated to additional shares in a ___.

A
  • purchase price
  • reduces
  • increases
  • stock split or stock dividend

Test your recall (38 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions