Choosing the Right Business Entity 2021 - 4 CPE Credit Hours

This mini-course describes and compares sole proprietorships, partnerships, limited liability companies, “C” corporations, and “S” corporations. It examines their advantages and disadvantages, permitting the participant to properly select the right business entity for their tax and liability needs.

Completion Deadline & Exam: This course, including the examination, must be completed within one year of the date of purchase. In addition, unless otherwise indicated, no correct or incorrect feedback for any exam question will be provided.

Course Level: Overview. This program is appropriate for professionals at all organizational levels.

Field of Study: Taxes

Prerequisite: General understanding of federal income taxation.

Advanced Preparation: None

Learning Assignment & Objectives

As a result of studying the assigned materials, you should be able to meet the objectives listed below.

ASSIGNMENT

At the start of the materials, participants should identify the following topics for study:

* Advantages and disadvantages of sole proprietorships

* Taxes for self-employed individuals

* Definition of partnership

* Partnership tax return & year taxable

* Contributed property, assets & services

* Sales & exchanges of partnership interests

* Limited liability companies

* C corporations & PSC corporations

* Inventories

* S corporations

Learning Objectives

After reading the materials, participants will be able to:

1. Cite the central differences among business entities and the advantages and disadvantages associated with basic business entity types.

2. Recognize the tax attributes of sole proprietorships, partnerships, LLCs, S corporations, and C corporations and how each entity can be used to enhance tax and financial purposes and objectives.

3. Specify the unique (e.g., self-employment) and general taxes applicable to particular entities and the tax forms that may be required.

4. Identify the basic deductions that are permissible for each entity type and the conditions under which they are allowed.

5. Determine the tax years, accounting methods, and valuation methods that each entity type may use, and how the entities can be terminated.

6. Specify for different entity types the basis and the tax effect of sales, exchanges, transfers, contributions, and distributions.

After studying the materials, answer the exam questions 1 to 20.

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