Bjorn owns a 60% interest in an S corporation that earned $150,000 in 2012.He also owns 60% of the stock in a C corporation that earned $150,000 during the year.The S corporation distributed $30,000 to Bjorn and the C corporation paid dividends of $30,000 to Bjorn.How much income must Bjorn report from these businesses?
A)$0 income from the S corporation and $30,000 income from the C corporation.
B)$30,000 income from the S corporation and $30,000 of dividend income from the C corporation.
C)$90,000 income from the S corporation and $0 income from the C corporation.
D)$90,000 income from the S corporation and $30,000 income from the C corporation.
E)None of the above.

Question

Quizplus · Accepted Answer

Bjorn must report $90,000 from the S corporation, which is 60% of the $150,000 earned, regardless of the distribution. For the C corporation, he reports the $30,000 dividends received.

Bjorn Owns a 60% Interest in an S Corporation That