"Understanding Pass-Through Entities: Test Your Knowledge on Partnerships and S...

An entity that is not required to file tax returns

An entity that does not pay income tax on its own and instead passes income or losses to partners or shareholders (correct)

An entity that is exempt from paying taxes

An entity that pays income tax on behalf of its partners or shareholders

To calculate the amount of self-employment tax that partners or shareholders owe

To distribute profits to partners or shareholders

To report the income or losses of the partnership or S corporation to the IRS (correct)

To calculate the amount of income tax that the partnership or S corporation owes

The amount of money that the partner or shareholder has invested in the partnership or S corporation, minus their share of the partnership's or S corporation's liabilities

The amount of money that the partner or shareholder has paid in taxes on their share of the partnership or S corporation's income

The amount of money that the partner or shareholder has earned from the partnership or S corporation

The amount of money that the partner or shareholder has invested in the partnership or S corporation, plus their share of the partnership's or S corporation's liabilities (correct)

<p>Partners and shareholders can deduct their share of the partnership or S corporation's business expenses and are not subject to self-employment taxes on their share of the partnership or S corporation's income</p> Signup and view all the answers