Which of the following statements about business entity income is TRUE? Blair is a shareholder in a C corporation. She owns 55% of the shares and performs services for the company. Her wages will be reported on Form W-2, and her share of the company's ordinary income will be reported to her on Schedule K-1 (Form 1120). Estrada is a limited partner who materially participates in the partnership and receives guaranteed payments. The partnership will report her guaranteed payments on Schedule K-1 (Form 1065). Estrada's guaranteed payments will be subject to self-employment tax. Laura is a shareholder in an S corporation. She owns 15% of the shares and does not perform services for the company. The company will report her share of income on Schedule K-1 (Form 1120-S). Laura will pay self-employment tax on her share of the ordinary income. Tanita is a sole proprietor. She may report her business income on Schedule C (Form 1040) or Form 1065. Mark for follow up
Which of the following statements about business entity income is TRUE? Blair is a shareholder in a C corporation. She owns 55% of the shares and performs services for the company. Her wages will be reported on Form W-2, and her share of the company's ordinary income will be reported to her on Schedule K-1 (Form 1120). Estrada is a limited partner who materially participates in the partnership and receives guaranteed payments. The partnership will report her guaranteed payments on Schedule K-1 (Form 1065). Estrada's guaranteed payments will be subject to self-employment tax. Laura is a shareholder in an S corporation. She owns 15% of the shares and does not perform services for the company. The company will report her share of income on Schedule K-1 (Form 1120-S). Laura will pay self-employment tax on her share of the ordinary income. Tanita is a sole proprietor. She may report her business income on Schedule C (Form 1040) or Form 1065. Mark for follow up
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Which of the following statements about business entity income is TRUE?
Blair is a shareholder in a C corporation. She owns 55% of the shares and performs services for the company. Her wages will be
reported on Form W-2, and her share of the company's ordinary income will be reported to her on Schedule K-1 (Form 1120).
Estrada is a limited partner who materially participates in the partnership and receives guaranteed payments. The partnership will
report her guaranteed payments on Schedule K-1 (Form 1065). Estrada's guaranteed payments will be subject to self-employment tax.
O Laura is a shareholder in an S corporation. She owns 15% of the shares and does not perform services for the company. The
company will report her share of income on Schedule K-1 (Form 1120-S). Laura will pay self-employment tax on her share of the
ordinary income.
O Tanita is a sole proprietor. She may report her business income on Schedule C (Form 1040) or Form 1065.
Mark for follow up](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F787d08ef-3bc6-4679-9061-371c28a72b8c%2F3b2453a7-fd19-41d3-bdcd-1bf7dd7bd713%2Fbb5d5e7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Which of the following statements about business entity income is TRUE?
Blair is a shareholder in a C corporation. She owns 55% of the shares and performs services for the company. Her wages will be
reported on Form W-2, and her share of the company's ordinary income will be reported to her on Schedule K-1 (Form 1120).
Estrada is a limited partner who materially participates in the partnership and receives guaranteed payments. The partnership will
report her guaranteed payments on Schedule K-1 (Form 1065). Estrada's guaranteed payments will be subject to self-employment tax.
O Laura is a shareholder in an S corporation. She owns 15% of the shares and does not perform services for the company. The
company will report her share of income on Schedule K-1 (Form 1120-S). Laura will pay self-employment tax on her share of the
ordinary income.
O Tanita is a sole proprietor. She may report her business income on Schedule C (Form 1040) or Form 1065.
Mark for follow up
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