Question: 1. How do C corporations, partnerships, LLC's, S corporations and sole proprietorships differ in terms of the liability protection they afford their owners?
2. Who pays the first level of tax on a C corporation's income? What is the tax rate applicable to the first level of tax? Who pays the second level of tax on a C corporation's income?
3. If XYZ corporation is a shareholder of BCD corporation, how many levels of tax is BCD's before-tax income potentially subject to? Has Congress provided any tax relief for this result? Explain.