Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Which statement regarding choice of entity considerations is incorrect? C corporations have a flat tax rate of 2 1 % , but are subject to
Which statement regarding "choice of entity considerations" is incorrect?
C corporations have a flat tax rate of but are subject to double taxation unless the profit of the
corporation is paid out in the form of salaryyear end bonus.
A minority owner in a passthrough entity who does not have other liquid assets is subject to being
"squeazedout" due to the effect of phantom income.
An S corporation shareholder can be like Biden" and avoid paying his fair share of Medicare tax by
paying a reasonable salary and then taking the remainder of the corporation profit in the form of a
distribution. However, this only works if there are other employees who help produce the income.
Because of the corporation limitation of only being allowed to have "one class of stock," an S
corporation cannot have voting and nonvoting stock.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started