Describe the three hurdles partner John must pass if he wants to deduct a loss from his share in an S corporation. What other loss limitation rule may impact the deductibility of losses from an S corporation?
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Describe the three hurdles partner John must pass if he wants to deduct a loss from his share in an S corporation. What other loss limitation rule may impact the deductibility of losses from an S corporation?
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- 1. When do owners of a partnership get the tax benefit of claiming apartnership business loss? What does the partnership entity do with the loss? 2. When do owners of a corporation get the tax benefit of claiming a corporate business loss? What does the corporate entity do with the loss?What is the legal relationship of a sole proprietorship to its owner? A. The owner and the sole proprietorship are considered to be the same legal entity. B. A sole proprietorship can survive the death of its owner. C. The owner can shelter profits of a sole proprietorship from taxation. D. Then owner is not liable for debts incurred by the sole proprietorship.Questions: What are the rules in distributing profits and losses? Is it valid to exclude a partner in the distribution of losses? Why? Why not?
- How may the capital deficiency of an insolvent partner can be eliminated?Tt. a. What amount of gain or loss does BLI recognize if the transaction is structured as a stock sale to Amy and Brian? What amount of corporate-level tax does BLI pay as a result of the transaction? b. What amount of gain or loss does Ernesto recognize if the transaction is structured as a stock sale to Amy and Brian?1. When a shareholder receives a noncash distribution of property that is encumbered by a liability (the shareholder assumes the liability on the distribution), how does the shareholder determine the amount of the distribution?
- If a partnership is liquidated, partners ( except for limited partners) are liable to the extent of their personal assets. In case a Corporation becane insolvent and decided to liquidate, would the owners (sharehorlders) also liable to the extend of their personal assets?Owners have no personal liability under which legal business structure? A. a corporation B. a partnership C. a sole proprietorship D. There is liability in every legal business structure.A drawback of a sole proprietorship is: O a. the unlimited liability of the partners. O b. conflicts with partners. O c. the complexity and cost to keep the records required by law. O d. its continued existence regardless of whether the owner lives or dies. O e. difficulty in obtaining financing.
- Describe the difference between a right of first refusal, an option agreement and a buy-sell agreement. Which type of transfer restriction can guarantee a buyer for a shareholder's investment in the event of death, retirement or disability?In the liquidation of a partnership, why might a partner be concerned that a fellow partner has a deficit net capital balance, and how might such a deficit be eliminated?In a transaction involving the transfer of corporate and partnership interests in which the special valuation rules under IRC Chapter 14 apply, which one of the following statements is CORRECT? A) The interest retained by the transferor must be valued at zero if this retained interest is not a qualified interest. B) The interest given to the transferee/recipient must be valued at zero if the transferee is not given a qualified interest. C) The interest retained by the transferor must be valued at zero if this retained interest is a qualified interest. D) The interest given to the transferee must be valued at zero if the transferee is given a qualified interest.