Barry owns a 30% interest in a partnership that earned $300,000 in 2017. He also

Q: Barry owns a 30% interest in a partnership that earned $300,000 in 2017. He also

Answer: c. $90,000 income from the partnership and $0 income from the corporation. Explanation to the answer: Barry should Report $90,000 (300,000*90%) income from his share of partnership in his individual tax return Barry should not report any income from his C corporation in his individual tax return because no dividends were paid during the year

ID: 2581605 • Letter: B

Question

Barry owns a 30% interest in a partnership that earned $300,000 in 2017. He also owns 30% of the stock in a C corporation that earned $300,000 during the year. The partnership did not make any distributions and the corporation did not pay any dividends. How much income must Barry report from these businesses?

a. $0 income from the partnership and $0 income from the corporation.

b. $0 income from the partnership and $90,000 income from the corporation.

c. $90,000 income from the partnership and $0 income from the corporation.

d. $90,000 income from the partnership and $90,000 income from the corporation.

Explanation / Answer

Answer:

c. $90,000 income from the partnership and $0 income from the corporation.

Explanation to the answer:

Barry should Report $90,000 (300,000*90%) income from his share of partnership in his individual tax return

Barry should not report any income from his C corporation in his individual tax return because no dividends were paid during the year

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