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Maryland Contractor License Practice 16

Practice 16 for Contractor License Exam learners in Maryland: 25 questions, explained answers, and a review routine.

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Question 1

1

A general contractor's contract contains an indemnification clause stating the contractor shall indemnify the owner for 'any and all claims arising out of the project, regardless of fault.' A worker injured by the owner's own negligence sues both parties. Which legal concept is most likely to limit enforcement of this clause in many states?

Question 2

2

A contractor is classified as an S Corporation for tax purposes. The owner-operator pays himself a reasonable salary of $80,000 per year and takes an additional $60,000 distribution from profits. Which of the following best describes the tax treatment of the $60,000 distribution?

Question 3

3

A contractor purchases lumber for $4,000 and sells it to the client at $5,000. What is the markup percentage applied to the cost?

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