Chapter 16 Business & Entity Selection

Question 1

Low cost resources to create

Answer 1

sole proprietorship

Question 2

Medium cost resources to create

Answer 2

General partnership
Limited partnership

Question 3

High cost resources to create

Answer 3

LLP
FLP
LLC
C corp
S corp

Question 4

S corp max number of owners

Answer 4

100

Question 5

C corp tax rate

Answer 5

21%

Question 6

Can have foreign investors

Answer 6

LLC

Question 7

QBI deduction for multiple businesses

Answer 7

Calculate the deductible QBI for each business (Business income x 20%)
Net the amounts to determined combined QBI
The deduction is the lesser of combined QBI or 20% of adjusted taxable income minus net capital gains

Question 8

QBI phaseout

Answer 8

MFJ 340,100 - 440,100
MFS 170,050 - 220,050
Single 170,050 - 220,050

Question 9

QBI margin tax rate

Answer 9

current marginal rate x (1-.2)