Farley and Gregor want to market a new line of fishing gear. To avoid income taxes at the corporate level, they should form

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Quizplus · Accepted Answer

To avoid income taxes at the corporate level, Farley and Gregor should form an S corporation. This type of corporation allows for pass-through taxation, where profits and losses are passed through to the shareholders to be reported on their individual tax returns, instead of being taxed at the corporate level. A C corporation would be subject to income tax at the corporate level, and a close corporation and private corporation are not recognized legal entities for tax purposes.

Farley and Gregor Want to Market a New Line of Fishing