South-Western Federal Taxation - Chapter 17: Corporations
South-Western Federal Taxation Chapter 17: Corporations
South-Western ? Grade A+
Federal Taxation Verified Questions
- Chapter and Answers Study Guide (2025 Edition)
17 Corporations
Study online at https://quizlet.com/_g15qzj
1. sole proprietor- - business is not a separate entity
ship - unlimited liability, personal assets at risk
- income is taxable to individual on Sch C/1040
- income/expenses retain their character/nature (e.g. ordinary/capital gains, etc.)
2. partnerships - unlimited liability, partners' personal assets at risk
- business reports income on a Form 1065
- not subject to Federal income tax
- must file separately
- most income/expenses aggregated on 1065
- some separately stated items include interest, dividend income, and long-term
capital gains
- partnership income/loss flows to partners and is taxable at individual level
3. S corporations - governed by Subchapter S of IRC
- files on Form 1120
- generally don't pay Federal income tax
- similar to partnerships, income/loss flows to shareholders
4. C corporations - governed by Subchapter C of IRC
- separate business entity
- files on Form 1120
- subject to entity-level Federal income tax
- results in double-taxation effect
- dividends distributed to shareholders are taxable at the individual level
- easy to raise large amounts of capital through widespread stock ownership
5. regular corpora- C corporations are considered regular corporations
tions
6. limited liability - avoids unlimited liability exposure
company (LLC) - may qualify to be taxed as proprietorships or partnerships
South-Western Federal Taxation Chapter 17: Corporations ? Grade A+ Verified Questions and Answers Study Guide (2025 Edition)
1/3
South-Western Federal Taxation Chapter 17: Corporations
South-Western ? Grade A+
Federal Taxation Verified Questions
- Chapter and Answers Study Guide (2025 Edition)
17 Corporations
Study online at https://quizlet.com/_g15qzj
1. sole proprietor- - business is not a separate entity
ship - unlimited liability, personal assets at risk
- income is taxable to individual on Sch C/1040
- income/expenses retain their character/nature (e.g. ordinary/capital gains, etc.)
2. partnerships - unlimited liability, partners' personal assets at risk
- business reports income on a Form 1065
- not subject to Federal income tax
- must file separately
- most income/expenses aggregated on 1065
- some separately stated items include interest, dividend income, and long-term
capital gains
- partnership income/loss flows to partners and is taxable at individual level
3. S corporations - governed by Subchapter S of IRC
- files on Form 1120
- generally don't pay Federal income tax
- similar to partnerships, income/loss flows to shareholders
4. C corporations - governed by Subchapter C of IRC
- separate business entity
- files on Form 1120
- subject to entity-level Federal income tax
- results in double-taxation effect
- dividends distributed to shareholders are taxable at the individual level
- easy to raise large amounts of capital through widespread stock ownership
5. regular corpora- C corporations are considered regular corporations
tions
6. limited liability - avoids unlimited liability exposure
company (LLC) - may qualify to be taxed as proprietorships or partnerships
South-Western Federal Taxation Chapter 17: Corporations ? Grade A+ Verified Questions and Answers Study Guide (2025 Edition)
1/3
