A Regular Corporation and a Personal Service Corporation Each Have

question 51

Multiple Choice

A regular corporation and a personal service corporation each have taxable income of $20,000 for the 2012 calendar year.Ignoring the alternative minimum tax provisions, which one of the following statements is true regarding the Federal income tax liabilities of these two corporations?

• A)Both corporations will have the same tax liability before credits or prepayments.
• B)The regular corporation will have a slightly lower tax liability before credits or prepayments.
• C)The personal service corporation will have a slightly lower tax liability before credits or prepayments.
• D)The regular corporation's tax liability will be exactly $2,000 less than the tax liability of the personal service corporation.
• E)The regular corporation's tax liability will be less than half that of the personal service corporation.

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Definitions:

Adaptive Value

The extent to which a particular trait or behavior increases the survival and reproductive success of an organism within a specific environment.

Parenthood

The state or experience of being a parent; involves raising and caring for one's offspring, and encompasses both the biological and emotional aspects.

Subjective Feelings

Personal experiences of emotions or sensations that are influenced by an individual's own perspectives, beliefs, or mental states.

Internal Factors

Influences within an organization or individual that affect their behavior and decisions.