Tomas Owns a Sole Proprietorship, and Lucy Is the Sole

question 53

True/False

Tomas owns a sole proprietorship, and Lucy is the sole shareholder of a C corporation. In the current year, both businesses make a net profit of $60,000. Neither business distributes any funds to the owners in the year. For the current year, Tomas must report $60,000 of income on his individual tax return, but Lucy is not required to report any income from the corporation on her individual tax return.

---

Definitions:

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, resulting in harm to another party.

Malfeasance

Wrongdoing or misconduct, especially by a public official.

U.S. Supreme Court

The highest federal court in the United States, with ultimate appellate jurisdiction over all federal and state court cases that involve a point of federal law.

Congress

The legislative body of a country, often bicameral, responsible for making laws, deciding on the national budget, and overseeing the government.