Assignment 1: Partnership vs. Corporation, accounting homework help

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Assignment 1: Partnership vs. Corporation

Due Week 9 and worth 240 points

Use the partnership and corporate tax returns for the practice sets titled, “Walk Upright Company” and “No More Ice, Inc.” that were prepared in Weeks 4 and 7.

Write a 4-5 page paper in which you:

  1. Compare and contrast the advantages and disadvantages inherent in electing to become a partnership and a corporation. Indicate key aspects in which the resulting choice is likely to impact tax obligations.
  2. Imagine that you are a Partner at Walk Upright Company. Justify to your team why you elected to become a partnership in an effort to minimize tax liability. Prepare a response to the objection that this election was the best choice.
  3. Imagine that you are the Chief Financial Officer (CFO) at No More Ice, Inc. Justify to your management team why you elected to become a corporation.
  4. Determine whether becoming a corporation was a wise choice as a potential strategy to minimize tax liability as a result. Provide support for your rationale.
  5. Analyze the steps that the leadership in a partnership or a corporation must take in order to change the entity’s existing election. Provide examples of circumstance under which changing the existing election would be appropriate. Indicate how this election change, once complete, may either generate a tax liability or be a benefit. Provide support for your rationale.

Your assignment must follow these formatting requirements:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

  • Examine the tax rules that are unique to corporations and the basic concerns relevant to shareholders and the corporation.
  • Examine the tax rules and treatment related to partnerships.
  • Use technology and information resources to research issues in corporate federal taxation.
  • Write clearly and concisely about corporate federal taxation using proper writing mechanics.

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Explanation & Answer

Attached.

Running head: PARTNERSHIP VS CORPORATION

Partnership vs Corporation
Name:
Institution:

PARTNERSHIP VS CORPORATION

2

Partnership vs. Corporation
Both partnerships and corporations are business structures, and the owners have tax
obligations. For the case of the partnership, the profits accruing from the business are distributed
between the partners and they have tax obligations as individual income earners. They are
therefore taxed at personal income level. In this regard, a partnership will have the advantage of
less taxation as compared to a corporation. The partnerships will also benefit from tax-free
contributions from the partners. When income distributions happen between the partners, they
will not be subjected to taxation. In contrast, a corporation will be subjected to taxation when
contributions to the business are made by its major shareholders. There is also a disadvantage of
taxation that applies to the dividends when the profits from the business are distributed. The
owners of partnerships can operate many partnership businesses and pay the same tax, unlike the
case where shareholders of corporations are taxed both on their dividends and from the corporate
tax (Parish, 2015).
In the case of a corporation, the owners are separate from the business when it comes to
their tax obligations. In this regard, the shareholders of a corporation are required to pay tax
from their income and also ensure that their corpo...


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