Business Entities Overview Vocabulary

Vocabulary flashcards covering legal classifications, nontax characteristics, tax classifications, and tax rules for various business entities.

Articles of Incorporation

The formal legal document filed with the state to create a corporation.

Articles of Organization

The formal legal document filed with the state to organize a limited liability company (LLC).

Certificate of Limited Partnership

The document required to be filed with the state, alongside a written agreement, to legally form a limited partnership (LP).

Form 8832

The tax form used by eligible unincorporated entities to elect to be classified as a C corporation for tax purposes under check-the-box regulations.

Form 2553

The tax form filed by an eligible corporation to make a valid election to be taxed as an S corporation.

Qualified Business Income (QBI) Deduction

A from-AGI non-itemized deduction available to flow-through entity owners equal to $20\%$ of QBI, reduced by specific business-attributable deductions.

Net Earnings from Self-Employment

The self-employment tax base computed as Schedule C net income multiplied by $92.35\%$ ($0.9235$).

Dividends Received Deduction

A tax deduction of $50\%$, $65\%$, or $100\%$ allowed to corporate shareholders on dividends received, depending on their ownership percentage in the distributing corporation.

Form 990

The annual information return titled "Return of Organization Exempt from Income Tax" required to be filed by tax-exempt organizations.

Form 990-T

The "Exempt Organization Business Income Tax Return" filed by tax-exempt organizations if their gross income from unrelated business exceeds $\$1,000$.

Accumulated Earnings Tax

A penalty tax potentially owed by a C corporation if it retains earnings for tax avoidance rather than for a legitimate business purpose.

Personal Holding Company Tax

A tax potentially imposed on a C corporation that retains earnings for tax avoidance instead of distributing them to shareholders.

Guaranteed Payments

Compensation paid to owners of entities taxed as partnerships, which is deductible by the entity and treated as self-employment income.

Excess Business Loss Limitation

A loss deduction limitation on flow-through losses that restricts current year offsets against non-business income to $\$512,000$ for married filing jointly ($\$256,000$ for other filing statuses).