Question

1. Can shareholders of a C corporations deduct its lossesagainst corporation's E&P passed to its shareholders asdividends (i.e. income of shareholders)?

2. When can a C (regular) corporation's corporate veil bepierced resulting in its shareholders being personally liable forcorporation’s actions?

3. How is the income of the following business entitiestaxed?

•Sole proprietorship

•C (regular) corporation

•Partnership

•Limited liability corporation (LLC)

•S corporation

4. Kent and Craig, who want to start a horse-training business,spoke to an insurance agent about getting insurance to coverpotential liabilities, but were told that they could not getliability insurance because of the high risk nature their proposedbusiness. What business entities would you recommend to Kent andCraig? Why?

Please answer all the questions above.