Alex,Ellen and Nicolas Are Equal Partners in a Local Restaurant

question 30

Multiple Choice

Alex,Ellen and Nicolas are equal partners in a local restaurant.The restaurant reports the following items for the current year: $\begin{array}{lr}\text { Business revenue } & \$ 770,000 \\\text { Business expenses } & 470,000 \\\text { Investment expenses } & 150,000\end{array}$ Each partner receives a Schedule K-1 with one-third of the preceding items reported to him/her.How must each individual report these results on his/her Form 1040?

• A)$100,000 income on Schedule E;$50,000 investment expense on Schedule A
• B)$257,667 income on Schedule E;$50,000 investment expense on Schedule A
• C)$300,000 income on Schedule E;$50,000 investment expense on Schedule A
• D)$300,000 income on Schedule E;$150,000 investment expense on Schedule A

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Definitions:

Evaluate Risk

The process of identifying and analyzing potential issues that could negatively impact key business initiatives or projects.

Sales Forecasts

Predictions of the future sales revenue of a product or service within a specified time frame, based on historical data, market trends, and economic conditions.

Evaluate Strengths

The process of identifying and assessing the strong points or advantages that an individual, company, or product possesses.