1401. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #8 Nontax factors are less important than tax factors in making a business decision. a. True b. False 1402. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #9 The § 465 at-risk provision and the § 469 passive activity loss provision have decreased the tax attractiveness of investments in real estate for partnerships and for limited liability companies. a. True b. False 1403. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #10 A C corporation offers greater flexibility in terms of the types of owners and capital structure than an S corporation. a. True b. False 1404. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #11 An S corporation has a lesser degree of limited liability than a C corporation. a. True b. False 1405. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #12 A limited partner in a limited partnership has limited liability whereas a general partner in a limited partnership has unlimited liability unless the limited partners agree that the general partner will have limited liability. a. True b. False 1406. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #13 A limited partnership can indirectly avoid unlimited liability of the general partner if the general partner is a corporation. a. True b. False 1407. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #14 C corporations and their shareholders are subject to double taxation. S corporations and their shareholders typically are subject to single taxation. Therefore for any given amount of corporate taxable income the combined tax liability of a C corporation and its shareholders will exceed that of an S corporation and its shareholders. a. True b. False 1408. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #15 Lime Inc. has taxable income of $330 000. If Lime is a C corporation its tax liability must be either $111 950 [($50 000 ´ 15%) ($25 000 ´ 25%) ($25 000 ´ 34%) ($230 000 ´ 39%)] or $115 500. a. True b. False 1409. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #16 A major benefit of the S corporation election is the general avoidance of double taxation. a. True b. False 1410. CHAPTER 13—COMPARATIVE FORMS OF DOING BUSINESS Question TF #17 Obtaining a deduction on payments made by a C corporation to shareholders is a technique for reducing double taxation. a. True b. False
