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:

Exercise Program

A planned regimen of physical activities designed for a specific purpose, such as improving fitness, health, or performance.

Brisk Pace

A faster than normal walking speed, often used in fitness to denote a level of intensity that increases heart rate and energy expenditure.

Body Composition

A term that refers to the percentages of fat, bone, water, and muscle in human bodies.

Muscular Strength

The highest level of force that can be generated by a muscle or a collection of muscles during one attempt.