Tax aspects of entity choices

Question 1

Key taxes

Answer 1

Buiness income, employee payroll tax & fica

Question 2

business income tax

Answer 2

fed state

Question 3

employee payroll tax ad fica

Answer 3

ss/medicare

Question 4

other taxes

Answer 4

C. Individual Income Tax
D. Self-Employment tax
E. Long Term corporate dividend
F. Capital Gains

Question 5

different tax treatemeents.

Answer 5

two regimes for corps

Question 6

two regimes for coprs

Answer 6

IRC subchapter C, subchapter S

Question 7

subchapter C

Answer 7

a. Generally applicable tax provisions for corps

b. This is where all corps start

Question 8

SUBCHAPTER s

Answer 8

a. Special rules for certain small corps

b. Created for small bus to get limited liability without having to get double taxed

Question 9

SPECIAL rules for subchapter S

Answer 9

F. Domestic corps only
G. Max of 100 shareholders
H. Only “eligible” shareholders allowed
I. Only 1 class of stock
J. Individuals, descendent estates, certain trusts
a. No corps, PSHIPS, multimember LLCs or non registered ___

Question 10

C coprs:

Answer 10

rare to advise,

Question 11

LLPS treatement

Answer 11

1. General Pship formed same way
   a. Writen pship agreement and filed with the state
2. Mostly for existing corps
3. Occasionally the right choice in special situations.

Question 12

LLC treatement

Answer 12

1. Members—managers—LLC

2. Advantages:

Question 13

avoiding uncecesarry tax is

Answer 13

important to business

Question 14

choice of entity can have

Answer 14

important tax consequences

Question 15

corps raise the risk of double

Answer 15

tax

Question 16

most LLC, LLPS ad lps

Answer 16

minimize tax burder and are easier on compliance

Question 17

Supchapter S corps offer

Answer 17

some advantages in particular istuaitons, but use requires care and expertise

Question 18

never use,.

Answer 18

PSHIPS