This module discussed several differences between individuals and corporations regarding tax treatment. Provide the following; 1....

This module discussed several differences between individuals and corporations regarding tax treatment. Provide the following;

1. If a colleague asked you for advice on incorporating, list at least two questions you would ask them to help them decide their business structure from a tax perspective.

2. Which two differences do you think are the most important for business owners to consider and why.

Expert Solution

1) Two of the most important questions that need to be considered before incorporation to decide on the business structure from tax perspective are:

a) Who shall be the owners of the business

b) How shall the incorporated business distribute its profit to the owners. It shall also keep in mind whether the business shall generate profit or loss in the initial stages.

2) The differences that are necessary to consider are:

The extent to which the personal assets are at risk from the liability arising out of operation of business that one is considering. In case of sole proproitership, there is no personal liability protection while a corporation on other hand is a separate legal entity and therefore liability is limited to assets of the corporations.

The incorporation shall bear in mind to avoid multiple taxation that arises from some types of incorporating structures. While corporation may be advantageous when it comes to liability, however theya re double taxed, first the profit of corporations is taxed and then the income distributed to owners or shareholders is taxed. Sole proproitership do not have to be taxed twice

jeff jeffy answered 2 years ago

Indicate whether the following statements are "True" or "False" regarding income tax treatment of corporations. a....

Indicate whether the following statements are "True" or "False" regarding income tax treatment of corporations. a. Gains and losses from property transactions are handled similarly. Whether a gain or loss is capital or ordinary depends upon the nature of the asset in the hands of the taxpayer making the taxable disposition. b. Like individuals, corporations are not allowed a deduction for interest paid or incurred on amounts borrowed to purchase or carry tax-exempt securities. c. The $100 floor and 10...

Identify the similarities and differences in the tax liability of corporations, individuals, partnerships, and own business...

Identify the similarities and differences in the tax liability of corporations, individuals, partnerships, and own business owners.

In this module (Module 11: Differential Analysis), we discussed several common business decisions such as whether...

In this module (Module 11: Differential Analysis), we discussed several common business decisions such as whether to accept a special order. In each case, a manager should make the decision attempting to maximize what outcome? One decision we discussed was whether to make or buy a component part for our production. Discuss the factors you would need to evaluate in order to make a proper decision as to whether a car manufacturer should make their own tires or purchase them...

Suppose that there are just three types of investors with the following tax rates: Individuals Corporations...

Suppose that there are just three types of investors with the following tax rates: Individuals Corporations Institutions Dividends 35% 20% 0% Capital gains 18 8 0 Individuals invest a total of $81.5 billion in stock and corporations invest $11.80 billion. The remaining stock is held by the institutions. All three groups simply seek to maximize their after-tax income. These investors can choose from three types of stock offering the following pretax payouts per share: Low Payout Medium Payout High Payout...

Your written assignment for this module is a worksheet that describes the following: The differences between...

Your written assignment for this module is a worksheet that describes the following: The differences between acute and chronic pain Reasons that a patient would experience acute versus chronic pain and patient presentation examples of each. You should be using complete sentences to answer the questions. Ensure that you are using correct grammar. In addition, support your answers using your textbook, course materials, credible internet resources, and scholarly journals. All citations must be in APA format. Please click here to...

1 Which of the following statement is true regarding the differences between internal and external audits?...

1 Which of the following statement is true regarding the differences between internal and external audits? Select one: a. External audit’s scope is broader than but includes that of the internal audit’s scope. b. External audit function reports to board of directors, internal audit function reports to CAE. c. External audit benefits management, internal audit benefits the third party in the areas of governance, risk and controls. d. External audit’s purpose is to express an opinion on financial statements. Internal...

3)Regarding the tax treatment of payments to securities holders; which of the following statements is completely...

3)Regarding the tax treatment of payments to securities holders; which of the following statements is completely true? The question is aimed at the PAYER of interest and/or dividends, not the recipient. interest paid is NOT tax-deductible; cash dividends paid to common stockholders are tax-deductible. interest paid is tax-deductible; cash dividends paid to common stockholders are also tax-deductible. interest paid is NOT tax-deductible; cash dividends paid to common stockholders are also NOT tax-deductible. interest paid is tax-deductible; but cash dividends paid...

Which of the following is TRUE regarding changes to 2020 tax law for individuals? Employers may...

Which of the following is TRUE regarding changes to 2020 tax law for individuals? Employers may pay up to $5,250 toward an employee's student loan principal and interest. This amount may be excluded from the employee's taxable income. Individuals may claim up to $500 of charitable contributions as an above-the-line deduction. Extended unemployment benefits are not taxable income. A high-deductible health plan (HDHP) may only pay for remote medical care for COVID-19-related treatment after the plan deductible is met.

Compare and contrast the tax rules and treatment applicable to corporations and partnerships. Indicate the major...

Compare and contrast the tax rules and treatment applicable to corporations and partnerships. Indicate the major way in which the tax treatment affects the shareholders or partners. Explain at least two (2) reasons why a business owner might opt to become a partnership over a corporation. Provide support for your rationale. Imagine that you are a consultant and make the recommendation that the most advantageous business structure is a C-corporation. Justify why you would recommend a Corporation over a Partnership....

the sales tax treatment of internet or mail-order purchases is quite controversial, as discussed in the...

the sales tax treatment of internet or mail-order purchases is quite controversial, as discussed in the section. think about the products you have purchased using the internet or by mail order in the recent past and roughly how much you spent. does NY state have a use tax? did you pay the use tax on taxable items? why or why not? how much did the opportunity to avoid sales tax influence your decision to purchase over the internet or by...

Question