Juanita Owns 60% of the Stock in a C Corporation

question 33

Multiple Choice

Juanita owns 60% of the stock in a C corporation that had a profit of $200,000 in 2013. Carlos owns a 60% interest in a partnership that had a profit of $200,000 during the year. The corporation distributed $45,000 to Juanita, and the partnership distributed $45,000 to Carlos. Which of the following statements relating to 2013 is incorrect?

• A) Juanita must report $120,000 of income from the corporation.
• B) The corporation must pay corporate tax on $200,000 of income.
• C) Carlos must report $120,000 of income from the partnership.
• D) The partnership is not subject to a Federal entity-level income tax.
• E) None of the above.

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Definitions:

C-H Bond(s)

The chemical bond between a carbon atom and a hydrogen atom, fundamental to the structure of all organic molecules.

Electronegativity Difference

A measure of the ability of an atom in a molecule to attract electrons to itself compared to another atom.

H-Se Bonds

Bonds between hydrogen and selenium atoms, often found in organoselenium compounds and playing roles in some enzymes.

Electronegativity Difference

The measure of the tendency of an atom to attract a bonding pair of electrons towards itself when bonded with another atom.