Question

Sole proprietorships (are/ are not) separate taxable entities. Partnerships (are/ are not) subject to the income tax. The tax treatment of limited liability companies usually follows the same tax rules that are applicable to (C corporations/ partnerships) . The C corporation (is/ is not) recognized as a separate taxpaying entity. A C corporation may elect to be taxed as (S corporation/ a partnership) . Because they follow the conduit concept as to the treatment of their tax attributes, (only C corporations and LLCs/ only partnerships and LLCs/ partnerships, LLCs, and S corporations) are often referred to as pass-through entities.

Answer 1

Sole proptietorships are not separate taxable entities as all business profits are pass through to the proprietor and proprietor must file tax return of the business with his personal return.

partnerships are not subject to the income tax as the entity does not have to pay taxes but its partners has to pay taxes individually according to their distributive share of the entity income.

the tax treatment of limited liability companies usually folows the same tax rules that are applicable to partnerships which is all profits flow through the owners and owners of the entity has to report it on their personal returns.

the C corporation is recognized as a separate taxpaying entity.

A C corporation may elect to be taxes as S corporation by retaining all profits to its capital and not passing it to shareholders.

because they follow the conduit concept as to the treatment of their tax attributes S corporations LLCs and partnerships are often referred to as pass-through entities.