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| *Ostroff, Fair and Company>>>Other Taxes |
Distinguish between reporting entities and taxable entities give examples of each? |
Distinguish between reporting entities and taxable entities give examples of each? Reporting entity is a company which must prepare financial reports that comply with accounting standards. Such companies are usually large companies and many times, public companies. Companies are obligated to prepare such statements when users of the information are dependent on the reports to make financial decisions. Ex of reporting companies: Merrill Lynch, Tyco, etc. Ex. of non-reporting companies: your general mom and pop shops where the managers are the owners of the shop. A taxable entity is any entity that is taxable. This includes corporations, LLC's, LLP's, Partnerships, etc. Sole proprietorships, some forms of general partnerships, not for profit entities are not taxable entities. Reporting entities are those that have reporting requirements to US tax authorities, but don't have a tax liability associated with it. Eg, a charity or fiduciary entity may have to file form 1041, but it won't have a tax liability. Taxable entities have to file returns because the return involves the computation of a tax liability. Me. I have a grad degree in tax. |
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