Which corporate form is not taxed on a personal basis?

Which corporate form is not taxed on a personal basis?

• A. C Corp
• B. S Corp
• C. Partnership
• D. LLC

Answer: (A)

Tax treatment depends on the entity type. Some forms are pass-through, meaning the business income is taxed only once on the owners’ personal returns. The one taxed at the corporate level is separate from the owners: the corporation pays corporate income tax on its earnings, and then shareholders may face personal tax again on any dividends—this is double taxation. Because of that, the form that is not taxed on a personal basis is the one that pays taxes at the corporate level. The others—S corporation, partnership, and LLC—are typically pass-through entities, with profits allocated to owners and taxed on their personal returns rather than at the entity level.

Tax treatment depends on the entity type. Some forms are pass-through, meaning the business income is taxed only once on the owners’ personal returns. The one taxed at the corporate level is separate from the owners: the corporation pays corporate income tax on its earnings, and then shareholders may face personal tax again on any dividends—this is double taxation. Because of that, the form that is not taxed on a personal basis is the one that pays taxes at the corporate level. The others—S corporation, partnership, and LLC—are typically pass-through entities, with profits allocated to owners and taxed on their personal returns rather than at the entity level.