Tax Implications When Selling of a Business


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Which of the following incorporation methods is NOT a pass-through taxation entity?

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1. When a sole proprietorship is sold for a profit, the individual owner may be liable to pay:

2. Which type of entity is permitted by law to assign a monetary value to intangible assets like goodwill?

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About This Quiz & Worksheet

Answer these questions on the tax implications during the sale of a business. Quiz topics include pass-through taxation entities and what taxes may be required for a sole proprietorship that's sold for a profit.

Quiz & Worksheet Goals

The following topics will be addressed:

  • Which entity assigns a monetary value to goodwill
  • Situations that result in increased scrutiny from the IRS
  • Risks associated with a sole proprietorship sale

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related lesson on tax implications when selling a business
  • Information recall - access the knowledge you've gained regarding pass-through taxation entities
  • Knowledge application - use your knowledge to answer questions about the selling of a sole proprietorship and a situation that might cause extra oversight from the IRS

Additional Learning

Consider the corresponding lesson named Tax Implications When Selling of a Business for more on the following:

  • Definition and types of pass-through entities
  • Example of an entrepreneurial individual
  • Scenario of a sole proprietorship
  • Tangible and intangible assets