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Jen and Saachi Are the Owners of J&S Legal Services

question 2167

Multiple Choice

Jen and Saachi are the owners of J&S Legal Services, P.C., an incorporated law firm treated as a C corporation for tax purposes. Jen and Saachi work full- time in the firm, performing all of the legal services. This year, J&S generates taxable income of $100,000 from the active business operations, and also reports investment interest income of $22,000 and losses of $28,000 from a passive activity. As a result, J&S Legal Services, P.C. reports taxable income of


Definitions:

Identified Person

An individual who has been recognized or named in a specific context or for a particular purpose.

Negotiable

Characteristic of a document or instrument that allows its transferability and enforceability by someone other than the original party.

Proceeds

Under Article 9 of the Uniform Commercial Code, whatever is received when collateral is sold or otherwise disposed of.

Honda Civic

A model of compact car manufactured by Honda, known for its efficiency, reliability, and widespread popularity.

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