Business Taxation Flashcards
6 cards from real CTA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Business Taxation flashcards as text
Which tax form reports a self-employed individual's business income and expenses?
Answer: Schedule C
Schedule C (Profit or Loss from Business) is used by sole proprietors to report business income and deductible expenses.
The self-employment tax rate for net self-employment earnings is:
Answer: 15.3%
The self-employment tax rate is 15.3%, covering 12.4% for Social Security and 2.9% for Medicare.
What is the net operating loss (NOL) carryforward rule under the Tax Cuts and Jobs Act?
Answer: No carryback, indefinite carryforward limited to 80% of taxable income
Post-2017 NOLs generally cannot be carried back but may be carried forward indefinitely, limited to 80% of taxable income.
Unreimbursed partnership expenses paid by a partner are reported on:
Answer: Schedule E, with a notation
Partners may deduct unreimbursed partnership expenses on Schedule E as a reduction to their distributive share of partnership income.
Which of the following is subject to the accumulated earnings tax?
Answer: C corporations accumulating earnings beyond reasonable business needs
The accumulated earnings tax applies to C corporations that retain earnings beyond the reasonable needs of the business to avoid shareholder-level tax.
A shareholder-employee of an S corporation must receive a:
Answer: Reasonable salary subject to payroll taxes
IRS rules require S corporation shareholder-employees who perform services to receive a reasonable salary subject to employment taxes.