Which Form 1120 C Defined 2023-2024

Hello in this lecture, we will define a C corporation according to fundamental accounting principles. In the 22nd edition, the definition of a C corporation is a corporation that does not qualify nor elect to be treated as a proprietorship or partnership for income tax purposes. Therefore, it is subject to income taxes, also called C Corp. The definition contrasts the normal corporation being a C corporation to other types of entities which could have corporation elements as well as elements of a pass-through entity. A C corporation is generally going to be the default, meaning that if we set up a corporation, it will typically be a C corporation unless set up otherwise. Let's take a look at an example. The idea of the corporation itself is that it will be a separate legal entity from the shareholders. There are huge benefits for the corporation to be a separate legal entity. One benefit is that the corporation has its own assets and has the rights to those assets, separate from the shareholder. This means that if something happened in terms of liability, such as a lawsuit, the lawsuit could go after the corporate assets. This provides liability protection for the owners, the shareholders, and stockholders, as their personal assets are protected. This also allows for more capital to be invested in a corporation. However, the downside of a typical C corporation is that it is also subject to income tax. If we give the rights to the corporation to own property and earn revenue, they also have the obligation to pay taxes on the revenue earned. The taxes are taxed on the corporate level, rather than the owner's level, as seen in a sole proprietorship or a general partnership. To solve the issue of double taxation on the same income, there are...