ACIS 4314 Study Guide - Midterm Guide: Macrs, Sole Proprietorship, Accrual
23 Sep 2016
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Corp: files art of incorporation 2)llc (hybrid, ex=ey): files art of organization 3) gp&lp: gp: written agreement called partnership argmt lp:written agreement & file certificate of lp 4)sole proprietorship (ex=dentist): nothing! Entity tax classification legal form may be diff from tax form. Yes = separate no = flow thru (to owners) Corps are c unless make s election by checking the box. Double taxation: entity & shareholder pay tax; to avoid, drd. & shift income from high taxpayer to low. Gr = for pass thru entities, income retains its characteristics from co to owner (dividend or oi) Institutional (mutual funds aka flow thru) & tax exempt(churches & unis) don"t pay taxes. C corps w/ nol can carry back 2 yrs & forward 20yrs. Business income: on schedule c; partnership: form 1065; s corp: form 1120s; c corp: form 1120. Business deductions: purpose=deduct exp incurred to gen income must be ordinary (normal for biz) & necessary (helpful)
