ZuoTi.Pro
Question

a. Explain the principal difference in the tax treatment of an S corporation and a C corporation. b. Why would a C corporation be used if an S corporation is generally exempt from tax? a. Explain the principal difterence in the tax treatment of an S corporation and a C corporation A C Corporation is reports his or her share of the income and for tax purposes is considered An S Corporation is Its income Each shareholder distributed

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

A) We are asked to explain the principal difference in the tax treatment of S corporation and C corporation,

C Corporation is taxed on their income, and for tax purposes is considered a separate entity, S Corporation is normally not taxed on their income. Its Income flows through and is reported by the shareholders. Each shareholder reports his or her share of the income even if it is not distributed.

B)

All Companies are eligible for making an S corporation election. S corporation must also meet a series of Conditions, such as having no less than 50 shareholders . others may choose the C corporation because of lower corporate tax rates on taxable income upto $75000.

0 0
Add a comment
Know the answer?
Add Answer to:
a. Explain the principal difference in the tax treatment of an S corporation and a C...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 2. Southern Corporation, a calendar year corporation, was formed 3 years ago by its sole shareholder,...

    2. Southern Corporation, a calendar year corporation, was formed 3 years ago by its sole shareholder, Jason, who has operated as an S corporation since its inception. Last year, Jason made a direct loan to the company in the amount of $4,000. Southern Corporation has paid interest on the loan but has not yet paid any principal (Assume the loan qualifies as debt for tax purposes). In year 4, War Eagle Corp experiences a $25,000 ordinary business loss and earns...

  • Dan is the sole shareholder of Tristar Corporation, a C corporation. In the current year, Tristar...

    Dan is the sole shareholder of Tristar Corporation, a C corporation. In the current year, Tristar earned $350,000 and distributed $75,000 to Dan. Ken is the sole shareholder of Shield Corporation, an S corporation. In the current year, Shield earned $350,000 and distributed $75,000 to Ken. Contrast the tax treatment of Tristar Corporation and Dan with the tax treatment of Shield Corporation and Ken.

  • What is the difference in paying income tax between a C Corporation, an S Corporation, and...

    What is the difference in paying income tax between a C Corporation, an S Corporation, and an LLC?

  • Manistee Corporation reported taxable income of $1,200,000 this year and paid federal income taxes of $408,000....

    Manistee Corporation reported taxable income of $1,200,000 this year and paid federal income taxes of $408,000. Not included in the computation was disallowed entertainment expenses of $25,000, tax-exempt interest of $20,000, and a net capital loss of $50,000 incurred this year. Manistee is an accrual basis taxpayer. The corporation’s current earnings and profits this year would be: Multiple Choice $1,200,000 $1,145,000 $787,000 $737,000 Boulder Company reports current E&P of $500,000 this year and accumulated negative E&P at the beginning of...

  • b For each tax treatment described, determine the applicable income tax concept(s), and explain how it...

    b For each tax treatment described, determine the applicable income tax concept(s), and explain how it forms the basis for the treatment: a. Jackson owned bonds that paid regular monthly interest. He contacted the bank and requested that the next $5,000 worth of interest payment checks be made out to and directly mailed to his son. Jackson is taxed on the $5,000 of interest, even though he never actually received the interest. b. Joan's barn on her ranch was destroyed...

  • QUESTION 20 Which item is not a "separately stated" item of an S Corporation? Tax-exempt interest...

    QUESTION 20 Which item is not a "separately stated" item of an S Corporation? Tax-exempt interest income. b. Section 1231 gain. Section 179 depreciation deduction. d. Officer salaries. QUESTION 21 Partners, LLC members and S Corporation shareholders'allocable share of income, gains, deductions and losses are reported on Form a True b. False QUESTION 22 A corporation may alternate between S corporation and C corporation status each year, depending on which results in more tax savings. a True b. False

  • You are a shareholder in a C corporation. The corporation earns$ 1.85per share before taxes. Once...

    You are a shareholder in a C corporation. The corporation earns$ 1.85per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. Assume the corporate tax rate is 40% and the personal tax rate on​ (both dividend and​ non-dividend) income is 30%. How much is left for you after all taxes are​ paid? You are a shareholder in an S corporation. The corporation earns $ 1.63per share before taxes....

  • 10. Which of the following creates a temporary tax difference in the recognition of deferred income...

    10. Which of the following creates a temporary tax difference in the recognition of deferred income taxes ? The payment of federal income taxes The receipt by a corporation of cash dividends from another domestic corporation Use of the installment sales method for tax reporting purposes The collection of life insurance on the death of an individual    11. At the end of Year One, Omaka Corporation is preparing its balance sheet. Depreciation of the company's equipment has created a...

  • Rajib is the sole shareholder of Cardinal Corporation, a calendar vear S corporation. In the current...

    Rajib is the sole shareholder of Cardinal Corporation, a calendar vear S corporation. In the current year, Cardinal generated a net profit of $350,000 ($520,000 gross income - $170,000 operating expenses) and distributed s80,000 to Rajib. Rajib must report the Cardinal Corporation profit of $350.000 on his Federal income tax return. True Faise

  • A. In its first year of existence (2017), SCC corporation (a C corporation) reported a loss...

    A. In its first year of existence (2017), SCC corporation (a C corporation) reported a loss for tax purposes of $30,000. How much tax will SCC pay in year 2018 if it reports taxable income from operations of $21,000 before considering loss carryovers? B. In its first year of existence (2018), SCC corporation (a C corporation) reported a loss for tax purposes of $30,000. How much tax will SCC pay in year 2019 if it reports taxable income from operations...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT