Lemon Corporation Incurs the Following Transactions

question 59

Multiple Choice

Lemon Corporation incurs the following transactions. Lemon maintains a valid S election and does not distribute any dividends to its shareholder, Patty.As a result, Patty must recognize ignore the 20% QBI deduction) :

• A)Ordinary income of $115,000 and long-term capital gain of $5,000
• B)Ordinary income of $115,000, long-term capital gain of $9,000, and $4,000 short-term capital loss.
• C)Ordinary income of $120,000.
• D)Capital gain of $120,000.

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