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Course Details

Choosing the Right Business Entity and Getting Cash Out of It - Mini Course (Course Id 241)

Updated / QAS / Registry / EA
  Add to Cart 
Author : Danny C Santucci, JD
Course Length : Pages: 43 ||| Review Questions: 20 ||| Final Exam Questions: 18
CPE Credits : 3.5
IRS Credits : 3
Price : $31.45
Passing Score : 70%
Course Type: NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents
Technical Designation: Technical
Primary Subject-Field Of Study:

Taxes - Taxes for Course Id 241

Description :

This mini-course describes and compares sole proprietorships, partnerships, limited liability companies, “C” corporations, and “S” corporations. It examines their advantages and disadvantages, permitting the participant to properly select the right business entity for their tax and liability needs. 

Usage Rank : 16000
Release : 2023
Version : 1.0
Prerequisites : General understanding of federal income taxation.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 24-Jun-2023
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - 241

Keywords : Taxes, Choosing, Right, Business, Entity, Getting, Cash, Out, It, Mini, Course, cpe, cpa, online course
Learning Objectives :

As a result of studying the assigned materials, you should be able to meet the objectives listed below.

    At the start of the materials, participants should identify the following topics for study:
      * Advantages and disadvantages of sole proprietorships
      * Taxes for self-employed individuals
      * Definition of partnership
      * Partnership tax return & year taxable
      * Contributed property, assets & services
      * Sales & exchanges of partnership interests
      * Limited liability companies
      * C corporations & PSC corporations
      * Inventories
      * S corporations
Learning Objectives:
    After reading the materials, participants will be able to:
      1. Cite the central differences among business entities and the advantages and disadvantages associated with basic business entity types.
      2. Recognize the tax attributes of sole proprietorships, partnerships, LLCs, S corporations, and C corporations and how each entity can be used to enhance tax and financial purposes and objectives.
      3. Specify the unique (e.g., self-employment) and general taxes applicable to particular entities and the tax forms that may be required.
      4. Identify the basic deductions that are permissible for each entity type and the conditions under which they are allowed.
      5. Determine the tax years, accounting methods, and valuation methods that each entity type may use, and how the entities can be terminated.
      6. Specify for different entity types the basis and the tax effect of sales, exchanges, transfers, contributions, and distributions.
Course Contents :

Chapter 1 - Choosing the Right Business Entity and Getting Cash Out of It

The Great Business Entity Tax Divide

Passthrough Entities - 20% Deduction


Deduction Amount

Qualified Trade Or Business

Corporations - 21% Rate

 Sole Proprietorship






Schedule C

Not-For-Profit Activities - §183

Deduction & Loss Limit

Profit Presumption - 3/5

Schedule C-EZ (Eliminated)

Self-Employment Tax - SECA

Estimated Tax

Sale of a Business

Classification of Assets

Income Splitting


Definition of Partnership

Section 761(a)


Partnership Agreement


Partner’s Share of Tax Items

Limited Partners

Family Partnerships - §704(e)



Partners Taxed as Individuals

Individual Returns & Schedules K-1

Separately Treated Items

Character of Items & Limitations

Deduction of Losses

Outside Basis Limitation - §704(d)

Loss Ultimately Deductible

Effect of Losses on Outside Basis - §705

Partnership Tax Return

Filing Requirements

Due Date of Return

Failure to File

Failure to Furnish Copies to Partners

Special Allocations - §704(b)

Economic Effect

“Substantial Effect”

Year Taxable - §706(a)

Limitation on Choice of Taxable Year

Closing of Partnership Year

Events That Terminate Partnership - §708(b)

Discontinuance of Business

Winding Up

Sale of 50% or More Interest - Repealed

Transactions between Partner & Partnership

Treating Partner as Stranger - §707(a)

Guaranteed Payments - §707(c)

Certain Losses Disallowed - §707(b)

Two Partnerships

Sales at Gain

Contributions of Property - §721

Contribution vs. Sale or Exchange

Disguised Sale - §707(a)

Property Distribution to Contributing Partner - §737

Contributed Property Distribution to Another Partner - §704(c)

Inside Basis of Contributed Assets - §723

Allocation of Precontribution Gain or Loss - §704(c)

Character of Subsequent Gain

Taint On Contribution- §724

Character of Subsequent Loss - §724(c)

Contribution of Services

Basis of Partner’s Interest - Outside Basis

Original Basis - §722

Adjustments to Basis - §705(a)

Effect of Liabilities - §752

Sales & Exchanges of Partnership Interests

Hot Assets - §751

Liabilities of Partnership - §752

Basis of Partnership Assets after Transfer of Interest

General Rule - §743(a)

Special Basis Adjustment - §§743, 754

Partnership Distributions - §731

Exceptions to General Rule

Partnership Liquidations

Types of Liquidating Distributions

Liquidating Distributions of Money - §736

Section 736(a) Payments

Section 736(b) Payments

 Limited Liability Companies


LLC Benefits

Advantages of LLCs over C Corporation

Double Tax

Basis Adjustment

Special Allocations



Unreasonable Compensation

Non-Tax Benefits

Advantages of LLCs over S Corporations

Advantages of LLCs over Limited Partnerships

Outside Basis & Debt Share Advantage

Substantial Economic Effect Rules - §704(b)

Discharge of Indebtedness Income

Advantages of LLCs over General Partnerships



Corporation Defined

Corporate Characteristics

Check-the-Box Regulations

C Corporations



PSC Corporations - §441, §448, §469

Testing Period - §441

Personal Services - §441

Principal Activity & Substantial Performance - §441

Employee-Owner - §441

Passive Loss Limitations - §469(a)(2)

Qualified Personal Service Corporation - §448

Incorporation - §351

Basic Requirements

Corporate Nonrecognition


Property Basis - §362

Stock Basis

Section 1244 Stock

Maximum Ordinary Loss

Original Issuance

Distributed Stock

General Requirements

Start-Up Expenses - §195

Covered Expenses


Organizational Expenses - §248


Stock Issuance & Syndication Expenses


Corporate Income Tax Rates

Tax Tables

Current Rate - 21%

Tax Return & Filing

Alternative Minimum Tax Repealed

Capital Gains & Losses - §1212

Net Capital Loss Carryovers

Dividends Received Deduction - §243

Dividends from Domestic Corporations

65% Exception

Charitable Contributions - §170


Personal Holding Companies - §541

Penalty Tax

Accumulated Earnings Tax Trap


Accumulated Earnings Credit

Accounting Periods & Methods

Accounting Periods

Accounting Methods

Methods Available

Inventories - §446

Identification Methods

Specific Identification Method

FIFO Method

LIFO Method

Valuation Methods

Cost Method

Uniform Capitalization Rules - §263A

Lower of Cost or Market Method

Corporate Liquidations & Distributions

 S Corporations




Becoming an S Corporation

S Corporation Status

Number of Shareholders

One Class of Stock

Domestic Corporation

Election Requirement

Making the Election

Form 2553

S Corporation Termination

Ceasing to Qualify

Passive Income - §1362

Taxation of S Corporations

Built-In Gain - §1374

Taxable Year

Fringe Benefits



CPE Taxes Course: https://www.cpethink.com/tax-cpa-courses
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