What entity they form

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Question: Alice and Joe want to form a business together. They anticipate that the company will lose money for the first two years, turn a profit in year three, and be profitable after that. Their plan is to share equally in the company's profits and losses. Once the company turns a profit, they plan to authorize quarterly distributions of half the company's profits from the previous quarter to the two owners (Alice and Joe will be the only owners). Based on the scenario above, what advice to Alice and Joe is accurate? (choose all that are correct) Group of answer choices If they form an entity and elect pass-through taxation, they will each be responsible to pay taxes on their share of all of the company's profits. If they form an entity and elect pass-through taxation, they will be responsible to may taxes only on the 50% of company profits distributed to them each quarter. If they form an entity and elect double taxation, the company will pay tax on the profits of the company and both Alice and Joe will pay tax on the 50% of company profits distributed to them each quarter. It doesn't matter what entity they form

Reference no: EM133612412

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