Asked by Yesenia Lazarte on Jun 16, 2024
Verified
Which of the following is correct regarding a company's legal entity type and the tax form it must file with the IRS?
A) Sole Proprietor - Form 1065
B) Partnership - Form 1120
C) C Corporation - Form 1120S
D) Sole Proprietor - Form 1040 Schedule C
Legal Entity Type
Categories under which business or organization structures are legally recognized, such as LLC, corporation, partnership.
Tax Form
A document used to report financial information to a governmental body for the purposes of tax calculation and compliance.
IRS
Internal Revenue Service, the federal agency responsible for administering and enforcing tax laws in the United States.
- Differentiate various legal structures and understand their consequences on financial reporting and tax obligations in QBO.
Verified Answer
AS
Alesha SandersJun 23, 2024
Final Answer :
D
Explanation :
Sole proprietors should file Form 1040 Schedule C with their personal tax return to report business income and expenses. Form 1065 is for partnerships, Form 1120 is for C corporations, and Form 1120S is for S corporations.
Learning Objectives
- Differentiate various legal structures and understand their consequences on financial reporting and tax obligations in QBO.