Rajib Is the Sole Shareholder of Robin Corporation, a Calendar

question 20

True/False

Rajib is the sole shareholder of Robin Corporation, a calendar year S corporation.Robin earned net profit of $350,000 ($520,000 gross income - $170,000 operating expenses) and distributed $80,000 to Rajib.Rajib must report Robin Corporation profit of $350,000 on his Federal income tax return.

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Definitions:

Capital Asset

Property owned for investment or personal use, excluding inventory or assets sold as part of a business's regular operations.

Guaranteed Payment

Payments made to partners in a partnership regardless of the partnership's income, often for services rendered or for the use of capital.

Separately Stated Item

Items on a partnership or S corporation tax return that are listed separately to ensure proper tax treatment at the individual level.

Ordinary Expense

In tax terminology, ordinary expense refers to any expense common and accepted in your trade or business operation.