A Few Years Back, Your Three U

question 80

Multiple Choice

A few years back, your three U.S. born friends that live in the State of Wyoming inherited a dude ranch that they plan to turn into a retirement haven for race horses. Peaceful Pastures wants to open its doors by spring, 2010. After attending several small business seminars, the three friends are certain they need limited liability. The high-risk, labor-intensive business will require a sizeable investment including an air-conditioned barn, several fenced-in pastures and loads of animal feed. You recently heard that one form of business ownership requires owners to pay self-employment taxes on the entire amount of earnings. You are fairly certain this is one tax loophole your friends would like to avoid. You recommend:

• A)Sole Proprietorship
• B) General Partnership
• C) Limited Liability Company
• D)S-Corporation

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Definitions:

Accommodation

In psychology, a cognitive process of adjusting one's schema to incorporate new information; in everyday usage, refers to making physical or social adjustments or adaptations.

Assimilation

The process by which a person or a group becomes part of another culture.

Existing Theories

Previously developed and accepted explanations for phenomena or observations within a particular domain of knowledge.

Toilet Training

The process of teaching a young child to use the toilet for urination and defecation, also known as potty training.