Juanita Owns 45% of the Stock in a C Corporation

question 35

Multiple Choice

Juanita owns 45% of the stock in a C corporation that had a profit of $120,000 in 2010.Carlos owns a 45% interest in a partnership that had a profit of $120,000 during the year.The corporation distributed $20,000 to Juanita,and the partnership distributed $20,000 to Carlos.Which of the following statements relating to 2010 is incorrect?

• A)Juanita must report $20,000 of income from the corporation.
• B)The corporation must pay corporate tax on $120,000 of income.
• C)Carlos must report $20,000 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:

Geographic Location

The specific physical position of something on Earth, often described using coordinates of latitude and longitude.

Broad Skill Set

Refers to having a wide range of abilities and competencies across different areas or disciplines.

Asset Ownership

The legal right or interest that a person or entity has in items of value, such as property, investments, or intellectual property.

Families in Canada

Groups of individuals related by blood, marriage, partnership, or adoption, residing in or originating from Canada, characterized by diverse structures and dynamics.