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:

Siblings

Brothers or sisters; individuals having one or both parents in common.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something.

Sexually Abused

Refers to an individual who has been subjected to unwanted sexual activities or behaviors typically involving coercion or manipulation.

Issues

Topics or problems that are currently being discussed or need to be addressed.