(TCO C) Which is not a characteristic of a sole proprietor?

Unlimited liability

Makes all the decisions

Has more than one owner

Files Schedule C

Question 2. 2. (TCO C) A partnership can elect which of the following?

To be taxed as an S corporation

To be classified as an association taxable as a corporation

To be considered a disregarded entity

To become a limited liability company

Question 3. 3. (TCO C) Which of the following is not a characteristic of a corporation?

Formed under IRC 351

Formed under county

law Double taxation

Single-level taxation

Question 4. 4. (TCO C) Which is true with regard to the receipt of boot under IRC 351?

It causes immediate recognition of gain.

The transfer must have a tax-avoidance purpose.

Assumption of liabilities by the transferee is not considered boot for gain recognition.

Boot can cause a loss to be recognized.

Question 5. 5. (TCO D) Which is not an acceptable way to raise capital?

Receive equity contributions in exchange for stock

Borrow funds from a bank

Use of illegal funds

Obtain financing from venture capitalists

Question 6. 6. (TCO D) Tax status of a cash distribution depends upon which of the following?

Corporations equity and principal positions

The board of directors

Corporations debt to equity ratio

Corporations earnings and profits

Question 7. 7. (TCO D) Olivia and Tatiana form O-T Squared in 2016. Olivia contributed services worth $24,000 and property worth $1,000, and Tatiana contributed property worth $25,000. Each received 25 shares of O-T Squared. Does the transaction qualify under IRC 351? If not, why not? Show your work, or provide your rationale.