Which IRS form is used by a business entity to elect its classification for federal tax purposes?
Ea Businesses
Question · Easy
Three out of five: a protest song
Short
A single-member LLC that has not filed Form 8832 is treated as what type of entity for federal tax purposes?
State-authorized business entity that the IRS treats as a partnership by default when it has two or more owners, but as part of its sole owner when it has one.
Entities and owners
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Chapter 1: Exam Cycle & Preparation
1.1 Current Exam Cycle, Blueprint & Study Decisions
Study guide
Horizon Ventures LLC has four members. The LLC has not filed any entity classification elections with the IRS. How will this entity be classified for federal tax purposes?
Question · Medium
Read the clue and guess the term in 6 tries.
Game
Which of the following is NOT a characteristic that distinguishes a C corporation from other business entities?
Federal tax account code the IRS assigns to a business, exempt organization, or other entity rather than to an individual.
An existing LLC has operated for several years. It makes an elective change from partnership to corporation status effective March 1, 2025. Six months later it wants to elect partnership status again. Without IRS consent, when is another elective change generally permitted?
Question · Hard
Which type of business entity provides limited liability protection to ALL of its owners while also allowing pass-through taxation by default?
Election that lets a married couple who co-own an unincorporated business each report a share as a sole proprietor.
Chapter 2: Business Entity Choices & Classification
2.1 Business Structures & Liability: Sole Proprietorship, Partnership, LLC, and Corporation
Under the hobby loss rules, an activity is presumed to be a for-profit business if it shows a profit in at least how many of the last 5 tax years?
Swap tiles to line up three of the same term.
Term Match
Sarah operates a small craft business from her home. She has reported losses for 4 of the last 5 years. She spends 10 hours per week on the activity and does not maintain separate business records. Which factor would MOST support her claim that this is a business rather than a hobby?
Filing a BBA partnership uses to correct reported items instead of an amended return.
Which of the following entities is NOT required to obtain an Employer Identification Number (EIN)?
A newly formed corporation wants to adopt a fiscal year ending June 30. Which of the following statements is TRUE regarding this election?
Partner's starting tax figure for a partnership interest: money contributed plus the adjusted tax cost of any property contributed.
2.2 Entity Classification & Check-the-Box Rules (Form 8832)
The general statute of limitations for the IRS to assess additional tax is 3 years from the filing date. Under what circumstance is the statute of limitations extended to 6 years?
Flip two cards at a time to find matching terms.
Term Pairs
Under Section 267, a taxpayer sells property at a loss to a related party. What is the tax treatment of this loss?
An S parent's eligible company that is treated as one with the parent after an election, not as a separate corporation.
The IRS uses three categories of factors to determine whether a worker is an employee or an independent contractor. Which of the following is one of those three categories?
A business is unsure whether a worker should be classified as an employee or an independent contractor. Which IRS form should the business file to request a determination?
Entity that may hold stock in an S corporation and is taxed at 37% on that portion's taxable income.
2.3 Classification Elections, Default Rules & the 60-Month Limitation
Which of the following workers is classified as a statutory employee for federal tax purposes?
Find five hidden terms in a grid of letters.
Term Search
Bright Star Corporation failed to withhold and deposit federal employment taxes for Q3. The IRS determined that the company's CFO and controller were responsible persons. What penalty applies?
Depreciation method used for most business and investment property placed in service after 1986, built from two parts.
Return preparation
How often must an employer file Form 941 to report federal income taxes withheld and Social Security/Medicare taxes?
For 2025, the Federal Unemployment Tax Act (FUTA) tax rate is 6.0% on the first $7,000 of wages paid to each employee. What is the maximum FUTA credit an employer can receive for state unemployment taxes paid?
Method under MACRS that a taxpayer generally uses only when the law requires it or when the taxpayer elects it.
2.4 EINs, Entity Changes & Closing a Business
Under the cash method of accounting, when is income generally recognized?
EA Part 2 Businesses Study Playlist
Lessons in order on YouTube
Video course
Pine Creek Construction, a C corporation, had average annual gross receipts of $32 million for the prior 3-year period. Which accounting method is this corporation required to use?
___ deduction: generally 20% of eligible profit from domestic trades, limited by W-2 wages and property once taxable earnings pass a threshold.
On December 28, a client mails a $5,000 check to a cash-basis consultant for services rendered. The consultant receives the check on January 3 of the following year and deposits it on January 5. In which year must the consultant report the income?
Valley Goods LLC sells merchandise and must account for inventory. When calculating cost of goods sold (COGS), which of the following is included?
Field such as health whose owners lose the 20% deduction above a phase-in range.
Chapter 3: Sole Proprietorships
3.1 Schedule C Gross Income & Allowable Business Expenses
A business wants to change from the cash method to the accrual method of accounting. Which form must be filed to request this change?
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A sole proprietor paid an unincorporated independent contractor $800 for web design services during 2025. What is the proprietor's Form 1099-NEC reporting obligation?
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