Based on your study of this lesson, please choose the best answer.
1. An individual who sets up a proprietorship is placing his/her personal assets at risk.
a) True b) False
2. Under a proprietorship, business income and losses are lumped together with personal income.
3. Under a partnership, a member’s personal assets are at risk if the partnership undergoes business failure.
4. Under a partnership, a separate tax return must be filed.
5. A corporation must file its own income tax return.
6. Partnerships and proprietorships always qualify for the $750,000 capital gains deduction.
7. If you were to change your proprietorship to a corporation, there would be immediate tax consequences.
8. If a proprietorship had a business loss in 2008, he/she could carry the loss.
a) back three years and forward seven b) back three years and forward twenty c) back seven years and forward indefinitely d) can't use the loss for another year
9. Business losses arising from a part-time farming operation can be used to offset any other personal income up to a limit of:
a) $17,500 b) $7,500 c) $8,750 d) $10,000
10. Cars and trucks used on highways qualify for an investment tax credit equal this percentage of the purchase price:
a) 15% b) 35% c) 20% d) 10%