CORPORATIONS, PARTNERSHIPS, ESTATES AND
TRUSTS 48TH EDITION FOR SOUTH-WESTERN
FEDERAL TAXATION 2025 WITH VERIFIED AND
APPROVED QUESTIONS AND ANSWERS 2025/2026
BEST GRADED A+
Who has the liability in a General Partnership & what kind of liability is there? - -
answer--Unlimited liability for all partners equally
Who has the liability in a Limited Partnership & what kind of liability is there? - -
answer--unlimited liability for the general partner & limited liability for the limited
partner
Who has the liability in a LLP & what kind of liability is there? - -answer--In some
states, all partners have limited liability for all claims against the company, EXCEPT
for those resulting in their own negligence or malpractice.
How are Sole proprietorships taxed? - -answer--No taxes are levied directly on the
earnings of the sole proprietorship as a business... only as income of the proprietor.
How are General Partnerships taxed? - -answer--Like Sole proprietorships, no taxes
are levied directly on the earnings of the general partnership as a business... only as
income of the owners.
How are General Corporations taxed? - -answer--Double taxation --> IRS taxes a C
corp's earnings, and then any dividends the company issues is then taxed again as
the personal income of stockholders
How are S Corporations taxed? - -answer--avoids double taxation by having its
income taxed as if it were a partnership... earnings are taxed only as income to
stockholders
How are LLC's taxed? - -answer--avoids double taxation by having its income taxed
as if it were a partnership... earnings are taxed only as income to stockholders
Who has the liability in a Sole proprietorship & what kind of liability is there? - -
answer--Unlimited liability towards the proprietor only
In other states, all partners have limited liability for any of their own negligence or
malpractice, but have unlimited liability for any other debts.
Who has the liability in a C corp & what kind of liability is there? - -answer--C corps
offer limited liability to all its owners (stockholders).
,Who has the liability in a S Corporation & what kind of liability is there? - -answer--
Stockholders (owners) have limited liability
Who has the liability in an LLC & what kind of liability is there? - -answer--Limited
liability for owners
Who are the owners in a Sole proprietorship? - -answer--proprietor
Who are the owners in a General Partnership? - -answer--all partners (generally two
partners)
Who are the owners in a Limited Partnership? - -answer--General partner manages
the business and accepts liability. Limited partner doesn't manage but has limited
liability.
Both contribute financially and share profits
Who are the owners in a LLP? - -answer--all partners
Who are the owners in a C corp? - -answer--stockholders and institutional investors
Who are the owners in a S corporation? - -answer--stockholders
Who are the owners in a LLC? - -answer--they're called members instead of
stockholders
Who manages a Sole proprietorship? - -answer--proprietor
Who manages a General partnership? - -answer--all partners
Who manages a Limited partnership? - -answer--General partner
Who manages a LLP? - -answer--all partners
Who manages a C corp? - -answer--stockholders elect a Board of Directors. The
Board of Directors appoint a CEO and other corporate officers to manage the firm.
Who manages a LLC? - -answer--typically the members (owners) manage the
company..
some LLC's hire professional managers
Agency - -answer--"Agency is the fiduciary relation which results from the
manifestation of consent by one person to another that the other shall act on his
behalf and subject to his control, and consent by the other so to act"
Ralph and Vi orally agreed to form a partnership. Each contributed cash and
personal worth P10,000 to a common fund. But they did not register the partnership
with the Securities & Exchange Commission (SEC).
a. The partnership is still valid;
, b. The partnership is void;
c. The partnership is voidable;
d. The partnership is unenforceable - -answer--a. The partnership is still valid;
A partnership which comprises all that the partners may acquire by their work or
industry during the existence of the partnership is:
a. Universal partnership of present property
b. Universal partnership of profits
c. Particular partnership
d. General partnership - -answer--b. Universal partnership of profits
A stock which has been issued by a corporation as fully paid up when in fact it is not,
because it has been issued as bonus or otherwise, without any consideration, at all,
or for less than part or for property, labor, or service at an overvaluation.
a. Promotion stock
b. Treasury stock
c. Watered stock
d. Bonus stock - -answer--c. Watered stock
Contracts between a corporation and third persons must be made by or under the
authority of its.
a. Board of Directors
b. Stockholders
c. President and Chief Operating Officer
d. General manager - -answer--a. Board of Directors
If the obligor binds himself to perform his obligation as soon as "he shall have
obtained a loan" from a certain bank, this obligation is:
a. With a term
b. Conditional
c. Suspensive
d. Resolutory - -answer--b. Conditional
Contract entered into in a state of drunkenness or during a hypnotic spell are:
a. Void
b. Valid
c. Voidable
d. Legal - -answer--c. Voidable
It is one of the essential elements of an obligation:
a. A maker or drawer
b. An object or prestation
c. A drawee
d. money - -answer--b. An object or prestation
Reluctantly and against her good sense and judgment, Rosemarie entered into a
contract for the delivery of 5 tables to Corazon for a price of P15,000.00. Contract is:
a. Void
b. Voidable
c. Unenforceable
TRUSTS 48TH EDITION FOR SOUTH-WESTERN
FEDERAL TAXATION 2025 WITH VERIFIED AND
APPROVED QUESTIONS AND ANSWERS 2025/2026
BEST GRADED A+
Who has the liability in a General Partnership & what kind of liability is there? - -
answer--Unlimited liability for all partners equally
Who has the liability in a Limited Partnership & what kind of liability is there? - -
answer--unlimited liability for the general partner & limited liability for the limited
partner
Who has the liability in a LLP & what kind of liability is there? - -answer--In some
states, all partners have limited liability for all claims against the company, EXCEPT
for those resulting in their own negligence or malpractice.
How are Sole proprietorships taxed? - -answer--No taxes are levied directly on the
earnings of the sole proprietorship as a business... only as income of the proprietor.
How are General Partnerships taxed? - -answer--Like Sole proprietorships, no taxes
are levied directly on the earnings of the general partnership as a business... only as
income of the owners.
How are General Corporations taxed? - -answer--Double taxation --> IRS taxes a C
corp's earnings, and then any dividends the company issues is then taxed again as
the personal income of stockholders
How are S Corporations taxed? - -answer--avoids double taxation by having its
income taxed as if it were a partnership... earnings are taxed only as income to
stockholders
How are LLC's taxed? - -answer--avoids double taxation by having its income taxed
as if it were a partnership... earnings are taxed only as income to stockholders
Who has the liability in a Sole proprietorship & what kind of liability is there? - -
answer--Unlimited liability towards the proprietor only
In other states, all partners have limited liability for any of their own negligence or
malpractice, but have unlimited liability for any other debts.
Who has the liability in a C corp & what kind of liability is there? - -answer--C corps
offer limited liability to all its owners (stockholders).
,Who has the liability in a S Corporation & what kind of liability is there? - -answer--
Stockholders (owners) have limited liability
Who has the liability in an LLC & what kind of liability is there? - -answer--Limited
liability for owners
Who are the owners in a Sole proprietorship? - -answer--proprietor
Who are the owners in a General Partnership? - -answer--all partners (generally two
partners)
Who are the owners in a Limited Partnership? - -answer--General partner manages
the business and accepts liability. Limited partner doesn't manage but has limited
liability.
Both contribute financially and share profits
Who are the owners in a LLP? - -answer--all partners
Who are the owners in a C corp? - -answer--stockholders and institutional investors
Who are the owners in a S corporation? - -answer--stockholders
Who are the owners in a LLC? - -answer--they're called members instead of
stockholders
Who manages a Sole proprietorship? - -answer--proprietor
Who manages a General partnership? - -answer--all partners
Who manages a Limited partnership? - -answer--General partner
Who manages a LLP? - -answer--all partners
Who manages a C corp? - -answer--stockholders elect a Board of Directors. The
Board of Directors appoint a CEO and other corporate officers to manage the firm.
Who manages a LLC? - -answer--typically the members (owners) manage the
company..
some LLC's hire professional managers
Agency - -answer--"Agency is the fiduciary relation which results from the
manifestation of consent by one person to another that the other shall act on his
behalf and subject to his control, and consent by the other so to act"
Ralph and Vi orally agreed to form a partnership. Each contributed cash and
personal worth P10,000 to a common fund. But they did not register the partnership
with the Securities & Exchange Commission (SEC).
a. The partnership is still valid;
, b. The partnership is void;
c. The partnership is voidable;
d. The partnership is unenforceable - -answer--a. The partnership is still valid;
A partnership which comprises all that the partners may acquire by their work or
industry during the existence of the partnership is:
a. Universal partnership of present property
b. Universal partnership of profits
c. Particular partnership
d. General partnership - -answer--b. Universal partnership of profits
A stock which has been issued by a corporation as fully paid up when in fact it is not,
because it has been issued as bonus or otherwise, without any consideration, at all,
or for less than part or for property, labor, or service at an overvaluation.
a. Promotion stock
b. Treasury stock
c. Watered stock
d. Bonus stock - -answer--c. Watered stock
Contracts between a corporation and third persons must be made by or under the
authority of its.
a. Board of Directors
b. Stockholders
c. President and Chief Operating Officer
d. General manager - -answer--a. Board of Directors
If the obligor binds himself to perform his obligation as soon as "he shall have
obtained a loan" from a certain bank, this obligation is:
a. With a term
b. Conditional
c. Suspensive
d. Resolutory - -answer--b. Conditional
Contract entered into in a state of drunkenness or during a hypnotic spell are:
a. Void
b. Valid
c. Voidable
d. Legal - -answer--c. Voidable
It is one of the essential elements of an obligation:
a. A maker or drawer
b. An object or prestation
c. A drawee
d. money - -answer--b. An object or prestation
Reluctantly and against her good sense and judgment, Rosemarie entered into a
contract for the delivery of 5 tables to Corazon for a price of P15,000.00. Contract is:
a. Void
b. Voidable
c. Unenforceable
