Solved by verified expert :1394. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #1
A business entity is not always taxed the same way as its legal form.
a.
True
b. False
1395. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #2
A business organized as a C corporation will always encounter lower tax rates
than a business organized as a sole proprietorship or as a partnership.
a.
True
b. False
1396. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #3
The check-the-box Regulations have made it easier for a business entity to be
classified as a partnership for Federal income tax purposes.
a.
True
b. False
1397. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #4
A limited liability company (LLC) is a hybrid business form that combines the
corporate characteristic of limited liability for the owners with the tax
characteristics of a partnership.
a.
True
b. False
1398. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #5
A limited liability company (LLC) can elect under the check-the-box rules to be
taxed as an S corporation.
a.
True
b. False
1399. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #6
Depending on the election made under the check-the-box provisions, a limited
liability company (LLC) with two or more owners might have to file a Form 1065
or a Form 1120.
a.
True
b. False
1400. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #7
Each of the following can pass profits and losses through to the owners:
general partnership, limited partnership, S corporation, and limited liability
company.
a.
True
b. False
1401. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #8
Nontax factors are less important than tax factors in making a business
decision.
a.
True
b. False
1402. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #9
The § 465 at-risk provision and the § 469 passive activity loss provision have
decreased the tax attractiveness of investments in real estate for partnerships
and for limited liability companies.
a.
True
b. False
1403. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #10
A C corporation offers greater flexibility in terms of the types of owners and
capital structure than an S corporation.
a.
True
b. False
1404. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #11
An S corporation has a lesser degree of limited liability than a C corporation.
a.
True
b. False
1405. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #12
A limited partner in a limited partnership has limited liability whereas a
general partner in a limited partnership has unlimited liability unless the
limited partners agree that the general partner will have limited liability.
a.
True
b. False
1406. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #13
A limited partnership can indirectly avoid unlimited liability of the general
partner if the general partner is a corporation.
a.
True
b. False
1407. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #14
C corporations and their shareholders are subject to double taxation. S
corporations and their shareholders typically are subject to single taxation.
Therefore, for any given amount of corporate taxable income, the combined tax
liability of a C corporation and its shareholders will exceed that of an S
corporation and its shareholders.
a.
True
b. False
1408. CHAPTER
13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #15
Lime, Inc., has taxable income of $330,000. If Lime is a C corporation, its tax
liability must be either $111,950 [($50,000 ´ 15%) + ($25,000 ´ 25%) + ($25,000
´ 34%) + ($230,000 ´ 39%)] or $115,500.
a.
True
b. False
