Jennifer Owns 60% of the Stock in Heath Corporation

question 11

Multiple Choice

Jennifer owns 60% of the stock in Heath Corporation. During the current year, Heath Corporation has taxable income of $80,000 and pays dividends of $30,000. Which of the following statements about Jennifer's income from Heath Corporation is/are correct?
I.If Heath Corporation is an S corporation, Jennifer must recognize $48,000 of income.
II.If Heath Corporation is a corporation, Jennifer must recognize $18,000 of income.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Misinterpretation

Incorrect or mistaken understanding or explanation of something.

Dehumanizing

The process of depriving a person or group of positive human qualities, making them seem less human.

Distortions of Body Image

A psychological condition where an individual has a distorted perception of their body size, shape, or appearance.

Suicidal Ideation

Thoughts about suicide, including considering or planning for suicide, which can range from fleeting thoughts to detailed planning.