108 Skopped Nails. Mona and her friends Jack and Bobby, all United States citizens, want to open a nail salon in Tennessee. They would all like to avoid personal liability for debts of the business and for wrongful acts of each other. They would also like to avoid taxation as much as possible. Mona is in favor of a corporation and asks if there is any problem with that form of business. Jack and Bobby say that they want to receive profit distributions and that they are concerned about excessive taxation with a corporation. Jack and Bobby urged the formation of a partnership even in the face of personal liability. Mona did some research and suggested an S corporation to Jack and Bobby. Are Jack and Bobby correct that tax liability will likely be greater with a corporate form of business (not an S corporate form) and why? eBook Multiple Choice No, they are incorrect because with only three (3) shareholders, the tax liability of a corporation would be exactly the same as the tax liability of a partnership if the net income of the corporation is not over $250,000. Yes, they are correct because the corporate form of business would result in double taxation, with the corporation being taxed on income and its shareholders being taxed again on dividends they receive 108 O No, they are incorrect because with only three (3) shareholders, the tax liability of a corporation would be exactly the same as the tax liability of a partnership if the net income of the corporation is not over $250,000. Skipped eBook Yes, they are correct because the corporate form of business would result in double taxation, with the corporation being taxed on income and its shareholders being taxed again on dividends they receive No, they are incorrect because with only three (3) shareholders, the tax liability of a corporation would be exactly the same as the tax liability of a partnership if the gross income of the corporation is not over $100,000 No, they are incorrect because with only three (3) shareholders, the tax liability of a corporation would likely be less than the tax liability of a partnership No, they are incorrect because with only three (3) shareholders, the tax liability of a corporation would be exactly the same as the tax liability of a partnership if the gross income of the corporation is not over $150,000