Certified Tax Professional (CTP)

Question 1

Which business entity type is subject to double taxation in the United States?

C Corporation S Corporation Partnership LLC taxed as disregarded entity

Correct Answer:

C Corporation

Question 2

An S Corporation shareholder must meet which requirement to avoid paying self-employment tax on their share of business income?

The shareholder must be an active employee receiving reasonable compensation The shareholder must own at least 50% of the corporation The shareholder must materially participate for 500+ hours The shareholder must be a U.S. citizen

Correct Answer:

The shareholder must be an active employee receiving reasonable compensation

Question 3

A partnership's basis in property contributed by a partner is generally equal to:

The contributing partner's adjusted basis in the property The fair market value at the date of contribution The original cost of the property The lower of FMV or adjusted basis

Correct Answer:

The contributing partner's adjusted basis in the property

Question 4

Which IRS form is used by a C Corporation to file its annual federal income tax return?

Form 1120 Form 1120-S Form 1065 Form 1040

Correct Answer:

Form 1120

Question 5

Under the check-the-box regulations, a single-member LLC is treated as which entity by default for federal tax purposes?

Disregarded entity (sole proprietorship) C Corporation S Corporation Partnership

Correct Answer:

Disregarded entity (sole proprietorship)

Question 1

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About this Exam

Prepare with the Certified Tax Professional (CTP) practice quiz. This question bank includes 30 questions covering professional, interest, ethical, ethics, and income. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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Certified Tax Professional (CTP)

This practice set contains 30 questions from the matching question bank and focuses on professional, interest, ethical, ethics, and income. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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Certified Tax Professional (CTP)

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