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P2-U01 · PART 2 · SOURCE CYCLE 2026-2027
Business Entities and Requirements
Only cards whose complete question and answer were checked against exact primary-authority evidence appear here.
Q1.Alder, a sole proprietor, has $425 of net self-employment earnings. What is generally required?
Pay SE tax and file Schedule SE
Q2.Alder, a sole proprietor, expects to owe $1,200 including SE tax. What is generally required?
Make estimated tax payments
Q3.When must a sole proprietor obtain an EIN for federal tax identification?
When the proprietor pays wages to employees or files pension or excise tax returns
Q4.What is the default federal income-tax classification of an individually owned domestic single-member LLC?
Sole proprietorship unless corporate treatment is elected
Q5.Willard is the single owner of an LLC that provides party planning services. Absent any elections, how will Willard’s LLC be treated for federal tax purposes? A. Partnership B. S corporation C. Disregarded entity D. C corporation
Disregarded entity
Q6.Future Capital, Inc. is a C corporation. Which of the following business activities would automatically classify this corporation as a PSC, or a "Personal Services Corporation"? A. Education B. Publishing C. Construction D. Engineering
Engineering