Characteristics and Income Taxation of Business Entities - Answer Key
All the statements above are true, except that the penalty for excess accumulated earnings is 15%, not 20%.
All of the answers are good answers, but there's two key concepts: profitable business and raise capital. A profitable business indicates a need for a separate entity and raise capital indicates that he might want to sell some stock. C-corporation is the best entity for Roger's needs.
S-corporations CAN HAVE a trust as shareholder, less than 75 shareholders, only one class of stock, and they avoid double taxation by paying dividends.
Betty will have taxable dividends from the utility stock (1099-DIV) and unarned income from the S-corp (Schedule K-1). Since she is no longer working, she would not receive any W-2.
General partners have unlimited liability. Partnerships are dissolved at the death, bankruptcy or incapacity of a partner. Partnerships must file a tax return Form 1065, but it is for information purposes only.
80% exclusion if ownership in the dividend paying firm is between 20-80%
The amount of risk that an insurance company retains after subtracting ...
Coverage that provides financial protection to investors, financial ...
The maximum loss from a peak to a trough of a portfolio, before ...
The absolute level of a fund's investments.
A technique used by insurance companies to calculate loss reserves.
The financial benefit that a risk-taking activity will bring ...
Learn how the rise in popularity of passive ETFs and mutual funds tracking indexes has increased the correlation among stocks, ...
Learn about common delta hedging strategies, including how to make a position in options delta neutral by offsetting risk ...
Learn about the risks of having a portfolio that is overweight in a particular sector and how investors should regularly ...
Learn about the primary risks of investing in the retail sector, such as bad economic conditions, regulation, competition ...