Jake is the sole shareholder of an S corporation that earned $60,000 in 2014.The corporation was short on cash and therefore distributed only $15,000 to Jake in 2014.Jake is required to recognize $60,000 of income from the S corporation in 2014.

Question

Quizplus · Accepted Answer

Jake is taxed on his share of the income earned by the S corporation of $60,000 ($60,000 × 100%),rather than the amount of his distributions.

Jake Is the Sole Shareholder of an S Corporation That