Juanita Owns 60% of the Stock in a C Corporation

question 36

Multiple Choice

Juanita owns 60% of the stock in a C corporation that had a profit of $200,000 in the current year.Carlos owns a 60% interest in a partnership that had a profit of $200,000 during the year.The corporation distributed $45,000 to Juanita,and the partnership distributed $45,000 to Carlos.With respect to this information,which of the following statements is incorrect?

• A)Juanita must report $120,000 of income from the corporation.
• B)The corporation must pay corporate tax on $200,000 of income.
• C)Carlos must report $120,000 of income from the partnership.
• D)The partnership is not subject to a Federal entity-level income tax.
• E)None of the above.

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Definitions:

Trans-Mississippi West

The region of the United States that lies west of the Mississippi River, an area that experienced significant settlement and development during the 19th and early 20th centuries.

Agriculture

The science, art, and practice of cultivating the soil, growing crops, and raising livestock, serving as a foundational component of the global economy.

Native Americans

Indigenous peoples who lived in the Americas before European colonization.

Zulu

Refers to the ethnic group of people with the largest population in South Africa, known for their rich cultural heritage and history, including military conflicts with British colonial forces.