Watts Owns Stock in Two S Corporations, MKP Corporation and Reynolds

question 37

Multiple Choice

Watts owns stock in two S corporations, MKP Corporation and Reynolds Inc. This year, Ms. Watts had the following income and loss items.
Salary $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $ 113,700
Business income from MKP $\quad$$\quad$$\quad$$\quad$ $ 42,000
Business loss from Reynolds $\quad$$\quad$$\quad$$\quad$ $ (28,000 )
If Ms. Watts materially participates in the business of both corporations, compute her AGI.

• A) $85,700
• B) $113,700
• C) $127,700
• D) $155,700

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Definitions:

Trichromatic Theory

A theory of color vision that proposes the eye perceives colors through the response rates of three types of cones sensitive to specific wavelengths of light.

Visible Spectrum

The portion of the electromagnetic spectrum that is visible to the human eye, ranging from violet to red.

Additively Mixing

The process of combining different wavelengths of light to create new colors, seen in technologies like computer screens and televisions.

Visual Cortex

The part of the brain responsible for processing visual information.