Bread Corporation Is a C Corporation with Earnings of $100,000.it
Bread Corporation is a C corporation with earnings of $100,000.It paid $20,000 in dividends to its sole shareholder,Gerald.Gerald also owns 100% of Butter Corporation,an S corporation.Butter had net taxable income of $80,000 and made a $15,000 distribution to Gerald.What income will Gerald report from Bread and Butter's activities?
Which of the following statements is incorrect?
A) S corporations must allocate income and expenses to their shareholders based on their proportionate ownership interest.
B) The number of S corporation shareholders is unlimited.
C) S corporation income is taxed to shareholders when earned.
D) S corporation losses can offset shareholder income from other sources.
Which of the following statements is true?
A) Shareholders in a C corporation can use C corporation losses to offset shareholder income from other sources.
B) C corporation losses remain in the C corporation and can offset capital gain income from other years.
C) C corporation shareholders are taxed based on their proportionate share of income.
D) Distributions of C corporation income are not taxable.
Nathan is single and owns a 54% interest in the new NT Partnership,a calendar-year entity.The NT Partnership reports $100,000 of profits for its first year.Assuming Nathan is taxed at a 35% marginal tax rate on the additional income,how much tax does Nathan owe if the NT Partnership does not distribute any of its profits to him?