SWFT Corp Partner Estates Trusts
42nd Edition
ISBN: 9780357161548
Author: Raabe
Publisher: Cengage
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If you were going to start a business with a few of your closest friends (or family), would you choose to form a partnership? Why or why not? Discuss tax planning opportunities utilizing a partnership structure. You can comment on advantages and disadvantages of forming a partnership.
Which of the following is considered nonpassive income? Income from a trade or business in which the taxpayer does not materially participate. Ordinary income a limited partner receives from a partnership they only invested in and do NOT participate in. Portfolio income: Interest, dividends, annuities, and royalties. Rental income from a non-real estate professional.
Select the best answer.
Which of the following statements regarding various entities is true?
O
O
O
A. A business entity with only one owner is classified as a corporation or is disregarded.
Question Q 10
B. A disadvantage of a pass-through entity is double taxation.
C. By default, an eligible entity that has a single member will be treated as a limited partnership.
Partnerships are taxpaying entities, because tax attributes pass through to the individual
partners.
O D.
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- which type of organization should be formed. Jackie and Susie are starting an accounting firm. They are deciding between a general partnership and a limited liability partnership. It is crucial to Jackie that she has limited liability and is not personally liable if Susie is negligent.arrow_forwardSelect the best answer. Which of the following statements regarding various entities is true? O O O A. A business entity with only one owner is classified as a corporation or is disregarded. ion Q 10 B. A disadvantage of a pass-through entity is double taxation. C. By default, an eligible entity that has a single member will be treated as a limited partnership. Partnerships are taxpaying entities, because tax attributes pass through to the individual partners. O D. Submit Answers 100% Complete Exitarrow_forwardChoose the correct. Which of the following is not a reason for the popularity of partnerships as a legal form for businesses?a. Partnerships may be formed merely by an oral agreement.b. Partnerships can more easily generate significant amounts of capital.c. Partnerships avoid the double taxation of income that is found in corporations.d. In some cases, losses may be used to offset gains for tax purposes.arrow_forward
- Which of the following may not be treated as a partnership for tax purposes? Arnold and Willis operate a restaurant. Thelma and Louise establish an LLP to operate an accounting practice. Lucy and Desi purchase real estate together as a business. Jennifer and Ben form a corporation to purchase and operate a hardware store. All of the above are partnerships.arrow_forwardWhilst searching for related literatures for her thesis study, Jackie found a tax law which provides that proceeds from the collection of taxes are to be used to rehabilitate a private organization under financial stress. This clearly violates what constitutional right? a. right to just compensation b. right to due process c. right against self-incrimination d. right to equal protection of the lawarrow_forwardValeri is opening a hair salon, but she does not know whatbusiness form it should take. What can you tell her aboutthe advantages and disadvantages of operating as a soleproprietorship versus a corporation?arrow_forward
- Robert is the CEO of a closely held business, and he would like to provide life insurance to all of his employees as a fringe benefit. Robert would like life insurance that permits him to pay the premium, so long as it is deductible as a business expense and permits the employee to designate the beneficiary of the policy. Which one of the following is the most appropriate insurance product for Robert's situation? A)Robert should enter into an entity buy-sell agreement with each employee using cash value life insurance. B)Robert should provide group term life insurance. C)Robert should provide key person life insurance. D)Robert should provide split-dollar life insurance.arrow_forwardWill you consider a partnership as a taxpayer? Yes or No.arrow_forwardLimited partners benefit from which of the primary advantages? Their responsibility for the firm's debts is prorated based on their percentage of ownership. They have the opportunity to earn tax-free income. They do not face any potential financial losses They have control over the administrative affairs of the partnership. Their maximum loss cannot exceed the amount of their capital investment.arrow_forward
- Whilst searching for related literatures for her thesis study, Jackie found a tax law which provides that proceeds from the collection of taxes are to be used to rehabilitate a private organization under financial stress.This clearly violates what constitutional right? right against self-incrimination right to equal protection of the law right to due process right to just compensationarrow_forwardWhich of the following is a reason for the popularity of partnerships as a legal form for businesses? Partnerships may be formed merely by an oral agreement. Partnerships can more easily generate significant amounts of capital. Partnerships avoid the double taxation of income that is found in corporations. In some cases, losses may be used to offset gains for tax purposes.arrow_forwardMr. Chuang set up a company called Good Home Limited. The company holds several properties in Hong Kong and lease out to earn rental income. Mr. Chuang wonders whether the company should pay property tax or profits tax. He also concerns if double taxation of the same income derived from a property under property tax and profits tax will charge to Good Home Limited and how it can avoid this if so. Advise Mr. Chuangarrow_forward
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