question archive Contrast the federal income taxation of a corporation with that of a sole proprietorship and a partnership
Contrast the federal income taxation of a corporation with that of a sole proprietorship and a partnership
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Contrast the federal income taxation of a corporation with that of a sole proprietorship and a partnership. Which of the three types of organization must file a federal income tax return?
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Answer:
Federal Taxation comparison table:
| Particulars | Corporation | Sole Propiertorship | Partnership |
| Is business separate from owners? | Yes | No | No |
| Taxation | Corporation tax is paid by corporation. Second tax paid by owners if corporate income is distribution to owener in the form of dividends. | Income/loss reported by owener. Accordingly, tax is paid by owner. | Income/loss reported by owener. Accordingly, tax is paid by owners. |
Three types of organisation must file a federal income tax return are the following:
(i) Tax-exempt organisation under section 501.
(ii) Tax-exempt organisation with annual gross receipts of less than $200,000 and assets less than $500,000
(iii) Tax-exempt organization that normally has gross receipts no more than $50,000 per year
