Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 11, Problem 14MCQ
To determine
Introduction: To operate a business, a taxpayer generally chooses between individual trading,
To choose: The correct statement regarding the election of S corporation.
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Students have asked these similar questions
The accumulated earnings tax, which is imposed on corporations for the accumulation of earnings in excess of reasonable business needs, does not apply to:
a. Closely-held corporations.
b. Widely-held corporations.
c. Corporations subject to the personal holding company tax.
d. Both "Widely-held corporations" and "Corporations subject to the personal holding company tax".
e. All of these choices are correct.
Which of the following is true of a "Subchapter S Corporation"?
The corporation is subject to double taxation.
O The company is not really a corporation so it is not a separate entity from the stockholders and does not file a
tax return.
The owners' personal assets are protected from customers and creditors.
O Tax on the business income of the company is paid only by the business.
O Owners of the equity of this business are called "debtors".
Select the best term for each definition below.
Definitions
Terms
a.
Shareholders can lose no more than the amount they invest in the company.
b.
Corporate earnings are taxed twice—at the corporate level and individual shareholder level.
c.
Like an S corporation, but there are no limitations on the number of owners as in an S corporation.
d.
Traces the line of authority within the corporation.
e.
Allows for legal treatment as a corporation, but tax treatment as a partnership.
f.
Has stock traded on a stock exchange such as the New York Stock Exchange (NYSE).
g.
The first time a corporation issues stock to the public.
h.
Describes (a) the nature of the firm’s business activities, (b) the shares to be issued, and (c) the composition of the initial board of directors.
Chapter 11 Solutions
Income Tax Fundamentals 2020
Ch. 11 - Ironwood Corporation has ordinary taxable income...Ch. 11 - Tayla Corporation generated $400,000 of taxable...Ch. 11 - Prob. 3MCQCh. 11 - Harrison Corporation generates capital...Ch. 11 - Prob. 5MCQCh. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - The purpose of Schedule M-1 on the corporate tax...Ch. 11 - Prob. 9MCQCh. 11 - Prob. 10MCQ
Ch. 11 - Prob. 11MCQCh. 11 - Prob. 12MCQCh. 11 - Prob. 13MCQCh. 11 - Prob. 14MCQCh. 11 - Prob. 15MCQCh. 11 - Prob. 16MCQCh. 11 - Prob. 17MCQCh. 11 - Prob. 18MCQCh. 11 - Prob. 19MCQCh. 11 - Prob. 20MCQCh. 11 - Prob. 21MCQCh. 11 - Quince Corporation has taxable income of $485,000...Ch. 11 - Prob. 2PCh. 11 - For its current tax year, Ilex Corporation has...Ch. 11 - DeMaria Corporation, a calendar year corporation,...Ch. 11 - Fisafolia Corporation has gross income from...Ch. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - The Loquat Corporation has book net income of...Ch. 11 - Caloundra Corporation has book income of $ 40,000....Ch. 11 - Prob. 10PCh. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Grevilla Corporation is a manufacturing company....Ch. 11 - Prob. 15P
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- 4) Identify which of the following statements is true. A) The S corporation rules were enacted to allow small corporations to enjoy the nontax advantages of the corporate form of business without being subject to the tax disadvantage of double taxation. B) A partnership can elect to be taxed as a corporation under the check-the-box regulations. As a corporation, an S election can be made. C) For C corporations that desire to be taxed like a partnership, the S corporation rules provide a practical alternative for an existing C corporation to obtain many of the tax benefits of being taxed as a partnership. D) All of the above are true. 5) Identify which of the following statements is true. A) A partnership can be an S corporation shareholder. B) A nonresident alien can be an S corporation shareholder. C) An S corporation can have more than 100 individual shareholders, since families are treated as a single shareholder. D) All of the above are false. 8) Identify which of the following…arrow_forwardCorporations are subject to specific corporate tax rates different from those for individuals. True or false ?arrow_forwardWhich of the following is a false statement concerning corporations? Select one: a. The corporation has unlimited liability for business debts. O b. The life of the corporation is unlimited. O c. When dividends are paid, net corporate profits are essentially taxed twice. O d. It is relatively simple to transfer ownership of corporate shares. Clear my choicearrow_forward
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