Rachel Is the Sole Member of an LLC,and Jordan Is

question 20

Multiple Choice

Rachel is the sole member of an LLC,and Jordan is the sole shareholder of a C corporation.Both businesses were started in the current year,and each business has a long-term capital gain of $10,000 for the year.Neither business made any distributions during the year.With respect to this information,which of the following statements is correct?

• A)The C corporation receives a preferential tax rate on the LTCG of $10,000.
• B)The LLC must pay corporate tax on taxable income of $10,000.
• C)Jordan must report $10,000 of LTCG on his tax return.
• D)Rachel must report $10,000 of LTCG on her tax return.
• E)None of the above.

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Definitions:

Defendant

A person, corporation, or entity that is being legally prosecuted or charged in a judicial setting.

Quasi-criminal Infractions

Offenses that are not entirely criminal but involve penalties or sanctions similar to those in criminal law, often relating to regulatory violations.

Moral Culpability

The degree of condemnation deserved by a person for wrongdoing, considering ethical and moral standards.

Confinement

The act of restraining or restricting someone or something within a space, or the state of being detained, such as in prison.