Mason Owns 45% of an S Corporation That Reported Net

question 49

Multiple Choice

Mason owns 45% of an S corporation that reported net income of $105,000 for the year. During the year, $20,000 was distributed to Mason from the corporation. How much should Mason include in his taxable income for the year?

• A) $20,000
• B) $47,250
• C) $56,250
• D) $67,250

---

Definitions:

Externality

An externality is a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in market prices.

Pollution Reduction

The process or policy of decreasing the amount of pollutants released into the environment, often to protect ecological health and human safety.

Permits

Official documents or licenses that authorize individuals or companies to undertake certain activities, often subject to regulations.

Pollution

The introduction of contaminants into the natural environment that cause adverse change.