Owners of which of the following entity types receive deductible compensation from the entity for working for the entity?
A)Sole proprietorship
B)Entity taxed as a partnership
C)S corporation
D)Both Entity taxes as a partner and S corporation

Question

Quizplus · Accepted Answer

An S corporation is a pass-through entity, meaning that the income and losses of the corporation are passed through to the shareholders. The shareholders are then responsible for paying taxes on their share of the income. However, S corporation shareholders are also considered employees of the corporation and can receive deductible compensation for working for the corporation.

Owners of Which of the Following Entity Types Receive Deductible