Agnes Is Going to Invest $90,000 in a Business Entity

question 13

Essay

Agnes is going to invest $90,000 in a business entity.She will manage the business entity.Her projected share of the loss for the first year is $36,000.Agnes' marginal tax rate is 33%.Determine the cash flow benefit of the loss to Agnes if the business form is:
a.A general partnership.
b.An S corporation.
c.An LLC.
d.A C corporation.

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Definitions:

Impossibility of Performance

A legal concept where a party cannot fulfill their contractual obligations due to unforeseen and uncontrollable circumstances.

Subject Matter

The topic, content, or substance that is being discussed or dealt with in a legal document, conference, or case.

Illegal

An action, item, or behavior prohibited by law and subject to penalties upon violation.

Consequential Damages

Financial losses suffered as a consequence of a breach of contract, beyond the immediate scope of the direct damages, not always recoverable under certain contracts.