Bjorn owns a 40% interest in an S corporation that earned $150,000 in 2008.He also owns 30% of the stock in a C corporation that earned $150,000 during the year.The S corporation distributed $35,000 to Bjorn and the C corporation paid dividends of $35,000 to Bjorn.How much income must Bjorn report from these businesses?
A)$0 income from the S corporation and $0 income from the C corporation.
B)$35,000 income from the S corporation and $35,000 income from the C corporation.
C)$60,000 income from the S corporation and $35,000 of dividend income from the C corporation.
D)$60,000 income from the S corporation and $0 income from the C corporation.
E)None of the above.

Question

Quizplus · Accepted Answer

Bjorn must report his $60,000 share ($150,000 F1F1F1S1F1F1F10 40%)of the S corporation's income on his individual tax return.He will report $35,000 of dividend income from the C corporation.

Bjorn Owns a 40% Interest in an S Corporation That