What is one of the tax disadvantages of a sole proprietorship?

$$ Assets withdrawn from the business will be subject to double taxation.

$$ The personal income tax rate may be higher than the corporate tax rate.

$$ Business losses will carry forward, negatively affecting the net income of future years.

$$ Profits are taxed first as they are recognized by the business and again as they are distributed to the shareholder.

Which example shows an advantage in the tax treatment of partnership losses?

$$ Partnership losses are reported at the entity level.

O Partnership loss does not revoke partnership status.

O Partnership losses may be subject to the passive activity loss rules.

O Partnership loss deductibility increases with an increase in partnership debt.

What will occur when a taxpayer requests a private letter from the IRS?

O The IRS will respond directly to the taxpayer

O The taxpayer will receive an information request from the IRS.

O The IRS will release all information received in the rulings to the public.

$$ The taxpayer will submit a request that has no confidential information included

How can a C corporation make payments to shareholders and avoid double taxation of its corporate income?

By distributing property instead of cash to the shareholders

By paying its shareholder$-$employees a salary instead of a dividend

By retaining its earnings and not pay out dividends for several years

By using net operating loss carryforwards to offset corporate income