Bjorn Owns a 40% Interest in an S Corporation That

question 14

Multiple Choice

Bjorn owns a 40% interest in an S corporation that earned $150,000 in 2008.He also owns 30% of the stock in a C corporation that earned $150,000 during the year.The S corporation distributed $35,000 to Bjorn and the C corporation paid dividends of $35,000 to Bjorn.How much income must Bjorn report from these businesses?

• A)$0 income from the S corporation and $0 income from the C corporation.
• B)$35,000 income from the S corporation and $35,000 income from the C corporation.
• C)$60,000 income from the S corporation and $35,000 of dividend income from the C corporation.
• D)$60,000 income from the S corporation and $0 income from the C corporation.
• E)None of the above.

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Definitions:

Predict

To declare or indicate in advance; to forecast the occurrence of something.

Experimental Method

A research method involving the manipulation and control of variables to study causality.

Determinism

The philosophical belief that all events, including moral choices, are completely determined by previously existing causes.

Hereditarianism

The belief that genes and hereditary factors significantly influence a person's traits, characteristics, and abilities.