Bjorn Owns a 60% Interest in an S Corporation That

question 35

Multiple Choice

Bjorn owns a 60% interest in an S corporation that earned $150,000 in the current year.He also owns 60% of the stock in a C corporation that earned $150,000 during the year.The S corporation distributed $30,000 to Bjorn and the C corporation paid dividends of $30,000 to Bjorn.How much income must Bjorn report from these businesses?

• A)$0 income from the S corporation and $30,000 income from the C corporation.
• B)$30,000 income from the S corporation and $30,000 of dividend income from the C corporation.
• C)$90,000 income from the S corporation and $0 income from the C corporation.
• D)$90,000 income from the S corporation and $30,000 income from the C corporation.
• E)None of the above.

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Definitions:

Variable Salary

A compensation structure where a portion of an employee's pay is based on some form of performance measure, leading to fluctuations in earnings.

Labor Market

The supply and demand for labor, where employers seek to hire workers and workers look for jobs.

High-Quality Workers

Employees who possess superior skills, expertise, and work ethic, contributing positively to an organization's objectives.

Incentives

Motivators or rewards designed to encourage certain behaviors or actions within individuals or organizations.