CTA Business Taxation 3

Question 1

Which tax form reports a self-employed individual's business income and expenses?

Accepted Answer

Schedule C

Answer

Schedule A

Answer

Schedule B

Answer

Schedule D

Question 2

The self-employment tax rate for net self-employment earnings is:

Accepted Answer

15.3%

Answer

7.65%

Answer

12.4%

Answer

2.9%

Question 3

What is the net operating loss (NOL) carryforward rule under the Tax Cuts and Jobs Act?

Accepted Answer

No carryback, indefinite carryforward limited to 80% of taxable income

Answer

2-year carryback, 20-year carryforward

Answer

5-year carryback, 25-year carryforward

Answer

No carryforward allowed

Question 4

Unreimbursed partnership expenses paid by a partner are reported on:

Accepted Answer

Schedule E, with a notation

Answer

Schedule C

Answer

Form 2106

Answer

They are not deductible

Question 5

Which of the following is subject to the accumulated earnings tax?

Accepted Answer

C corporations accumulating earnings beyond reasonable business needs

Answer

S corporations retaining earnings

Answer

Partnerships retaining profits

Answer

LLCs taxed as disregarded entities

Question 6

A shareholder-employee of an S corporation must receive a:

Accepted Answer

Reasonable salary subject to payroll taxes

Answer

Distribution equal to all S corp earnings

Answer

Guaranteed payment similar to a partnership

Answer

No compensation, only distributions