1) Entity Legal Classification and Nontax Characteristics
a) Legal Classification
i) State laws recognize corporations or limited liability companies (LLCs) as legal entities
separate from their owners (shareholders or members).
1) Corporate Taxable Income Formula
a) Refer to Exhibit 16-1 for Corporate and Individual Tax Formulas.
b) The corporate tax formula is similar to the individual tax formula but corporations dont itemize
deductions or deduct perso
1) Review the Taxation of Property Dispositions
a) Gain or loss is realized when a person engages in a transaction (an exchange of property rights
with another person).
b) Gain or loss realized is computed by subtracting the trans