Question

1.The profits on a limited liability corporation (“LLC”) are taxed at:

The federal and state corporate tax rates

The federal and state partnership tax rates

The owner’s individual federal and state tax rates

15 percent for long-term profits and 30 percent for short-term profits

2.The profits of a business organized as an S-Corporation are taxed at:

The federal and state corporate tax rates

The federal and state partnership tax rates

The owner’s individual federal and state tax rates

15 percent for long-term profits and 30 percent for short-term profits

Answer 1

Answers-

Q 1)

The correct Option is third option. The owner’s individual federal and state tax rates

LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns.

The LLC owners pay taxes to the state on their personal returns; the LLC itself does not pay a state tax.

The options 1, 2 and 4 are incorrect.

Q 2)

The correct option is third Option. The owner’s individual federal and state tax rates.

S corporation is not subject to federal income tax. Instead, the shareholders are taxed upon their allocated share of the income.

The option 1, 2 and 4 are incorrect.