ACC 403 Study Guide - Final Guide: Adjusted Gross Income, Tax Deduction, Gross Income

• School: University of Miami
• Department: Accounting Business Administration
• Course: ACC 403
• Professor: Collins

Document Summary

Less: deductions from agi (greater of itemized or standard deduction) Adam smith"s canons of taxation: equity, economy, certainty, convenience. Sole proprietorships: taxed on net profits from the business regardless of how much was withdrawn, a business loss can offset the sole proprietor"s other income, liable for all debts of business (unlimited liability) Partners are taxed on their share of profits regardless of whether they receive any distributions. Profits retained in the partnership can be distributed later tax-free. C corporations: double taxation (dividends are nondeductible, corporate losses can only offset corporate profits (no flow-through to shareholders, owners can be employees and receive tax-free employee fringe benefits. Profits and losses flow through to owners each year. Shareholders are taxed on their share of profits even if they receive no distribution: loss deductions are limited to basis (unlike partners, shareholders do not increase their basis for liabilities of the business)