One of the Reasons Why C Corporations Have an Edge

question 22

Multiple Choice

One of the reasons why C corporations have an edge over sole proprietorships is:

• A) the ease of its formation.
• B) because single individuals can retain the total profits of the company.
• C) because members have unlimited liability toward the company.
• D) the permanence of the business.

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Definitions:

Capital Losses

The loss incurred when a capital asset (like stocks or real estate) is sold for less than its purchase price.

Capital Gain Distributions

The payments made to mutual fund shareholders from the fund's sale of stocks or assets, subject to capital gains taxes.

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, and other assets.

Schedule D

Schedule D is a tax form used to report capital gains or losses from the sale of capital assets, including stocks, bonds, and real estate.