Juan Is the Sole Shareholder of an S Corporation,and Diego

question 43

Multiple Choice

Juan is the sole shareholder of an S corporation,and Diego owns a sole proprietorship.Both businesses,which were started in 2008,make a profit of $300,000 in 2008.Each owner withdraws $225,000 from his business during the year.Which of the following statements is correct?

• A)Diego must report net profit from his business of $300,000 for 2008.
• B)Juan must report dividend income of $300,000 for 2008.
• C)Diego's proprietorship is required to pay tax on the $300,000 profit for 2008.
• D)Juan's S corporation must pay tax on $300,000 for 2008.
• E)None of the above.

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Definitions:

Extinction

The process through which a species, family, or larger group of organisms becomes permanently absent or dies out from the Earth.

Communal Professions

Occupations that are associated with relationships.

Agentic

Pertaining to the ability of individuals to act independently and make their own free choices, influencing their own life circumstances.

Maternal

Pertaining to a mother, her behaviors, care, and role in child development.