Luis Is the Sole Shareholder of a Regular C Corporation

question 52

Multiple Choice

Luis is the sole shareholder of a regular C corporation, and Eduardo owns a proprietorship. In the current year, both businesses make a profit of $80,000 and each owner withdraws $50,000 from his business. With respect to this information, which of the following statements is incorrect?

• A) Eduardo must report $80,000 of income on his return.
• B) Luis must report $80,000 of income on his return.
• C) Eduardo's proprietorship is not required to pay income tax on $80,000.
• D) Luis's corporation must pay income tax on $80,000.
• E) None of the above.

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Definitions:

Psychiatric Conditions

Disorders affecting mental health, characterized by alterations in thinking, mood, or behavior associated with distress or impaired functioning.

Depression

An emotional disorder defined by an ongoing feeling of sadness or apathy towards activities, significantly impacting daily routines.