Test Bank For Principle OF Taxation For Business And Investment Planning 16th Edition By Jones

Test Bank For Principle OF Taxation For Business And Investment Planning 16th Edition By Jones

Chapter 10
Sole Proprietorships, Partnerships, LLCs, and S Corporations

True / False Questions

1. Haddie’s Hats is a regular corporation. The business must file an income tax return each year to report its taxable income or loss and pay any related taxes.
True False

2. A partnership is an unincorporated business activity owned by at least two taxpayers.
True False

3. A corporate shareholder usually cannot be held personally liable for the debts arising from the corporate business.
True False

4. Gabriel operates his business as a sole proprietorship. This year the business incurred an operating loss. The loss can be used to offset other income he earned during the year.
True False

5. Mr. Dilly has expenses relating to a qualifying home office of $14,320. The taxable income generated by the business before any deduction of home office expenses was $13,700. His allowable home office deduction is $14,320.
True False

6. Businesses must withhold payroll taxes from payments made to independent contractors and periodically remit such taxes to the state and federal governments.
True False

7. Matthew earned $150,000 in wages during 2012. FICA taxes withheld by his employer would have been $11,475.
True False

8. The FICA taxes authorized by the Federal Insurance Contribution Act is imposed upon all of the employee’s wages for the year.
True False