Business Formation
The most frequently asked tax questions related to Business Formation
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Answer Tax QuestionsS Corporation - include a nonresident alien?
Asked Tuesday, January 03, 2012 by an anonymous user
None of the shareholders can be nonresident aliens.
How many shareholders can an S Corporation include?
Asked Tuesday, January 03, 2012 by an anonymous user
An S corporation can have no more than 75 shareholders. None of the shareholders can be nonresident aliens.
What are some disadvantages of selecting to be a Partnership compared to other entities?
Asked Tuesday, January 03, 2012 by an anonymous user
Just as in a sole proprietorship, partners are still responsible for unlimited liability, both personal and business. Therefore, everything you own is at risk. Also, you cannot make certain important business decisions without the agreement of the partner.
A general partnership offers few tax benefits to business owners.
Sole Proprietorship - Schedule C
Statutory Employee reporting
Asked Tuesday, January 03, 2012 by an anonymous user
Statutory employees report their income and expenses on Schedule C instead of as miscellaneous deductions on Schedule A subject to the 2% AJI floor limitation.
Generally, statutory employees are full time life insurance salespersons, full time traveling sales persons and pieceworkers.
Generally, statutory employees are full time life insurance salespersons, full time traveling sales persons and pieceworkers.
Can my K-1 loss from my PTP offset other K-1 income?
Asked Tuesday, January 03, 2012 by an anonymous user
NO. PTP (Publically Traded Partnership) losses can only be used to offset income from that specific PTP.
It cannot be used to offset income from other PTPs or other K-1 entities.
It cannot be used to offset income from other PTPs or other K-1 entities.
Sole Proprietorship - Schedule C
What Form does a Sole Proprietor file?
Asked Tuesday, January 03, 2012 by an anonymous user
You would file a separate Schedule C with Form 1040 for every different business you are involved in which is not incorporated or a multi member LLC.
Is there a limit on the number of owners a LLC has?
Asked Tuesday, January 03, 2012 by an anonymous user
No. There is no limit on the number of owners (members) for a LLC or a Limited partnership or a C Corporation. There are limits for S Corporations and Sole Proprietorships.
Sole Proprietorship - Schedule C
Carryback current years business loss?
Asked Tuesday, January 03, 2012 by an anonymous user
You can carryback your current years loss 2 years then forward 20 years.
A 3 year carryback is available for a NOL attributable to casualty losses or a presidential declared disaster.
A farming NOL can be carried back 5 years.
A 3 year carryback is available for a NOL attributable to casualty losses or a presidential declared disaster.
A farming NOL can be carried back 5 years.
Sole Proprietorship - Schedule C
Hobby activity - Is it reported for tax purposes?
Asked Tuesday, January 03, 2012 by an anonymous user
Hobby income is reported as other income on Form 1040 line 21 and expenses are deductible only up to income and limited by the 2% of AGI floor and reported on Schedule A Miscellaneous itemized deductions. You are not allowed a hobby activity loss.