Question

1. The C corporation tax rate is significantly lower than the top individual marginal tax rate.

   True

   False

2. Owners who work for entities taxed as a partnership receive guaranteed payments as compensation. The guaranteed payments are not self-employment income.

   True

   False

3. Business income allocations from an S corporation to its shareholders are potentially subject to the 3.8 percent net investment income tax if the shareholders are passive investors in the S corporation.

   True

   False

4. C corporations and S corporations are separate taxpaying entities that pay tax on their own income.

   True

   False

5. Business income allocations to owners from an LLC that is taxed as a partnership are subject to self-employment tax if the owners are significantly involved in the entity’s business activities.

   True

   False

6. An S corporation shareholder who is not a passive investor is allowed to deduct a business loss allocation from the S corporation to the extent of the shareholder’s basis in the stock no matter how large the loss.

   True

   False

7. Beginning in 2018, C corporations are no longer subject to double taxation.

   True

   False

8. please answer all questions , thanks

Answer 1

1	The C corporation tax rate is significantly lower than the top individual marginal tax rate.	TRUE
2	Owners who work for entities taxed as a partnership receive guaranteed payments as compensation. The guaranteed payments are not self-employment income.	FALSE
3	Business income allocations from an S corporation to its shareholders are potentially subject to the 3.8 percent net investment income tax if the shareholders are passive investors in the S corporation.	TRUE
4	C corporations and S corporations are separate taxpaying entities that pay tax on their own income.	FALSE
5	Business income allocations to owners from an LLC that is taxed as a partnership are subject to self-employment tax if the owners are significantly involved in the entity’s business activities.	TRUE
6	An S corporation shareholder who is not a passive investor is allowed to deduct a business loss allocation from the S corporation to the extent of the shareholder’s basis in the stock no matter how large the loss.	TRUE
7	Beginning in 2018, C corporations are no longer subject to double taxation.	FALSE