Explain the “check the box” election. Prior to this election, how did the IRS determine whether a business was taxed at the entity level or as a pass through entity?
Answer to relevant QuestionsGive five examples of organizational forms used to produce goods and services. What tax characteristics distinguish one from the other? What role do corporate dividends play in comparing the relative tax positions of investors in corporations versus partnerships? If corporations face tax disadvantages relative to partnerships, why might we continue to observe the corporate form, especially for large public businesses? With the Tax Reform Act of 1986, corporate tax rates fell from 46% in 1986 to 40% in 1987 and to 34% for income earned subsequent to 1987. Because the tax code allowed a 3 year carry back for net operating losses during this ...List some tax rule restrictions that prevent organizational form arbitrage. How do they succeed in preventing this arbitrage?
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