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.

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Definitions:

Pastuerizing Equipment

Machinery used in the pasteurization process to sterilize food and drink products, such as milk, by heating them to eliminate pathogens.

Late Shipment

The act of delivering goods after the expected or agreed-upon delivery time.

Potential Loss

The possible negative financial impact or damage that could occur in the future.

Rescind

To annul, void, or rescind a law, order, or agreement.