Choosing the entity: sole proprietors to exempt groups
SEE 2 Chapter 1 · IRS outline 1A1, 1A2, 1A3, 1A4, 1A5, 1A6, 1A7, 1A8
Business season has arrived at Lantern Street Tax. Theo, fresh from his first individual season, meets the clients who will walk with him through this whole course: Daniel Okafor, whose plumbing business is outgrowing Schedule C; Mira and Jon, opening a bakery together; Walt Brandt of Copperline Tools, Inc.; and a neighborhood food pantry that wants to be official. The first question Nadia asks each of them is the same: what are you, for tax purposes? Everything else follows from that answer.
In this chapter
- Sole proprietorships: one person, no wall
- Partnerships and the qualified joint venture
- C corporations and S corporations
- LLCs and the default classification rules
- Tax-exempt entities and associations
- The employer identification number
This chapter has 6 lessons and 51 practice MCQs with explanations, plus flashcards and a recall sheet.
What this chapter covers
- Sole proprietorships
- partnerships and qualified joint ventures
- corporations and S corporations
- LLCs
- exempt entities
- default classification and Form 8832
- the EIN