The Ability to Flow Through to the Investors the Tax

question 8

Multiple Choice

The ability to flow through to the investors the tax deductions and losses that are typically generated by an emerging company or a company with significant up-front debt is an advantage of a

• A) corporate tax structure.
• B) pass-through entity.
• C) member-managed LLC.
• D) manager-managed LLC.

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Definitions:

Cash

Currency and coins that are legal tender, including money deposited in checking accounts and obtainable on demand.

Income Statement

A financial statement that shows a company's revenues and expenses, culminating in the net income for a specific period.

Owners' Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership interest.

Revenue And Expenses

The income generated from normal business operations and the costs incurred to generate that income.