IRS Business Taxation 4

Question 1

A sole proprietor reports business income and expenses on which schedule attached to Form 1040?

Accepted Answer

Schedule C

Answer

Schedule A

Answer

Schedule B

Answer

Schedule D

Question 2

What is the maximum Section 199A qualified business income (QBI) deduction percentage for eligible taxpayers?

Accepted Answer

20% of QBI

Answer

10% of QBI

Answer

25% of QBI

Answer

50% of QBI

Question 3

A corporation's tax year ends June 30. When must it file its Form 1120 (without extension)?

Accepted Answer

September 15

Answer

October 15

Answer

July 15

Answer

August 15

Question 4

Under the passive activity rules, which type of income CAN offset passive activity losses?

Accepted Answer

Passive activity income from other activities

Answer

W-2 wages from an employer

Answer

Portfolio income (dividends and interest)

Answer

Active business income from a sole proprietorship

Question 5

Which business entity provides limited liability to all owners AND avoids double taxation without making an S corporation election?

Accepted Answer

Limited liability company (LLC) taxed as a partnership

Answer

C corporation

Answer

General partnership

Answer

Sole proprietorship

Question 6

What is the self-employment tax rate applied to net self-employment income up to the Social Security wage base?

Accepted Answer

15.3%

Answer

7.65%

Answer

12.4%

Answer

2.9%

Question 7

A C corporation donates appreciated stock (basis $5,000, FMV $15,000) to a qualified charity. What is the maximum deduction?

Accepted Answer

$15,000 but limited to 10% of taxable income

Answer

$5,000 (basis only)

Answer

$15,000 (fair market value)

Answer

$10,000 (the appreciation amount)