The difference between partnership and corporation can be best described in which of the following statements? a. In a corporation, income is taxed at the corporate level, whereas, in a partnership, income is taxed twice. b. In a partnership, income is taxed once at the individual level; whereas, in a corporation, income is taxed twice c. Income from both forms of organizations is double-taxed. d. In a partnership, income is exempted from tax up to $10 million; whereas, in a corporation, income is taxed twice

The difference between partnership and corporation can be best described in which of the following statements? a. In a corporation, income is taxed at the corporate level, whereas, in a partnership, income is taxed twice. b. In a partnership, income is taxed once at the individual level; whereas, in a corporation, income is taxed twice c. Income from both forms of organizations is double-taxed. d. In a partnership, income is exempted from tax up to $10 million; whereas, in a corporation, income is taxed twice

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter10: Partnership Taxation

Section: Chapter Questions

Problem 9MCQ

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Which statement is true? In computing the net taxable income of a corporation availing of the optional standard deduction, the OSD shall be deducted from the total sales or revenue. A corporate taxpayer is not qualified to avail of NOLCO as this is only applicable to individual taxpayers. The income of a business partnership shall be taxed with the regular corporate income tax and the share of each partner from the income of the partnership shall be subject to the regular income tax as well. Generally, government owned or controlled corporations are taxable.
Which of the following statements is true? a. S corporations are typically subject to one level of tax at the corporate level. b. Partnerships are typically subject to one level of tax at the partner level. c. LLCs and LLPs must be taxed as C corporations. d. REITs typically pay tax at the entity level. e. All of the above are true.
In general terms, indicate how the following separate entities are subject to the Federal income tax. a. C corporations are separate taxable entities, (but not district from/distinct from) their shareholders. b. How are partnerships taxed?Income & losses pass-through to the partners/at the partnership level/at the partnership and partner level . c. S corporations ( never/normally/rarely) incur Federal income tax liabilities. d. Fiduciary entities are subject to Federal income tax when income (exceeds expenses/ is distributed to the beneficiaries/ is retained by the entity) .
For Federal income tax purposes, a distribution from a partnership to a partner is treated the same as a distribution from a C corporation to its shareholders. True False
What is the main difference between the way a partnership is taxed versus the way a corporation is taxed?
Which one of the following statements regarding partnership taxation is incorrect? a.Partnership income is comprised of ordinary partnership income or loss and separately stated items. b.A partnership is required to file a return with the IRS. c.A partner's profit-sharing percentage may differ from the partner's loss-sharing percentage. d.A partnership is a tax-paying entity for Federal income tax purposes.
Partnerships: a.Are not taxable entities. b.Are taxed in the same manner as individuals. c.File tax returns on Form 1041. d.File tax returns on Form 1120.
Which of the following statements regarding federal income tax is true? A. An entity may elect to change its classification for federal income tax purposes every four years. B. An insurance company is automatically classified as a partnership for federal income tax purposes. C. A limited liability company may have the fiscal year as its taxable Year or may follow partnership rules in selecting it's tax year end. D. Partnerships and S corporations can adopt adopt a year end that produces income deferral for up to 6 months.
Which of the following statements regarding income recognition is true? A. Owners in a regular corporation realize entity level income at the time the income is earned. B. Owners of an S corporation realize entity level income in the tax year in which the S corporation's year ends. C. Partnership income is recognized in the year in which it is distributed to the partners. D. Sole proprietorship income is recognized at the time the income is distributed to the owner.
Which of the following is false? Individual and Corporate taxpayers must declare their intention to avail of the OSD in their annual income tax Return. The option to avail of the OSD shall be irrevocable for the whole taxable year. The option to avail of the OSD is applicable to taxpayers subject to regular income tax on their net income None of the above A corporation may be formed by one person only. Every partnership shall be taxed in the same manner as a corporation. The share of a partner in the income of a professional partnership shall be subject to regular income tax. None of the above
Which of the following business entities, if any, pay income tax at the business entity level? Partnership O S Corporation O C Corporation O None of the above
TRUE OR FALSE Double taxation is when partnership earnings are taxed when earned by the business and then taxed again when distributed to the owners.