Luis Is the Sole Shareholder of a Regular C Corporation

question 5

Multiple Choice

Luis is the sole shareholder of a regular C corporation, and Eduardo owns a proprietorship. In the current year, both businesses make a profit of $80,000 and each owner withdraws $50,000 from his business. With respect to this information, which of the following statements is incorrect?

• A) Eduardo must report $80,000 of income on his return.
• B) Luis must report $80,000 of income on his return.
• C) Eduardo's proprietorship is not required to pay income tax on $80,000.
• D) Luis's corporation must pay income tax on $80,000.
• E) None of these.

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Definitions:

Financial Support

Assistance given in the form of money to help fund a particular project, activity, person, or organization.

Social Work Roles

Various functions and responsibilities undertaken by social workers, including advocacy, counseling, and community organization.

Advocate

A person who actively supports or argues for a cause or policy, often on behalf of another individual or group.

Organizer

An individual responsible for planning and arranging events, activities, or the structure of an organization or group.