Question

Subchapter S covers which of the following specific areas of tax law?

1) S corporations
2) Self-employed individuals
3) Tax rates
4) Simplification
5) Sales

Answer 1

Subchapter S covers tax law related to 5.S corporations, which allows eligible domestic corporations to avoid double taxation by electing to be treated as such.

Step-by-step explanation:

Subchapter S primarily covers tax law related to S corporations. An S corporation is a special type of corporation created through an IRS tax election. An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation.

Regarding the specific areas of tax law you mentioned:

1. S corporations are covered under Subchapter S of the Internal Revenue Code.
2. Self-employed individuals mainly deal with self-employment taxes and are not specifically covered under Subchapter S.
3. Tax rates for S corporations are passed through to shareholders and taxed at individual rates.
4. Simplication of tax law is a broader concept and not confined to Subchapter S.
5. Sales taxes are state-level taxes and not specifically related to Subchapter S of federal tax law.