For source use IRS website and Smith, Ephraim P., Philip J. Harmelink and James Hasselback. Federal Taxation: Comprehensive Topics (2019) (eBook). CCH, 04/2018. VitalBook file. Starting a company is something many people have chosen to do and choosing a business entity type can be an especially important part of this process. Please write a minimum 8 page research paper (not including the cover sheet and reference page) answering the following questions, and be sure to cite your sources following APA guidelines:
1. What is an S corporation, and what are the advantages of forming one? Why would you form an S corporation rather than a partnership or sole proprietorship? 2. How does a corporation qualify as an S corporation? 3. How is income treated for the shareholders of an S corporation?
4. What is the function of the S corporation’s accumulated adjustment account? 5. How do you determine a shareholder’s basis in an S corporation? What if he or she contributed property subject to a liability? 6. What is a sole proprietorship, and what are the advantages of forming one? Why would you form a sole proprietorship rather than a partnership or an S corporation? Are there disadvantages and if so, what are they?