Angie Has a 60% Ownership Interest in a Business Entity

question 124

Multiple Choice

Angie has a 60% ownership interest in a business entity.She is in the 33% tax bracket.The entity incurs $20,000 of meals and lodging expense for Angie,which she believes qualify for exclusion under § 119.Which of the following statements is correct?

• A)If the entity is a partnership,the effect of the $20,000 expenditure by the partnership on Angie's tax liability is an increase of $6,600.
• B)If the entity is a sole proprietorship,the effect of the $20,000 expenditure by the sole proprietorship on Angie's tax liability is $0.
• C)If the entity is a C corporation,the effect of the $20,000 expenditure by the corporation on Angie's tax liability is $0.
• D)Only a.and c.are correct.
• E)a. ,b. ,and c.are correct.

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Definitions:

Biotic Factors

Components of an ecosystem that are living, including plants, animals, and microorganisms.

Abiotic Factors

Non-living chemical and physical parts of the environment that affect living organisms and the functioning of ecosystems.

Ecosystem

A biological community of interacting organisms and their physical environment.

Primary Consumers

Organisms that feed on primary producers; they are usually herbivores that eat plants and algae.