Jen and Saachi are the owners of J&S Legal Services,P.C.,an incorporated law firm treated as a C corporation for tax purposes.Jen and Saachi work full-time in the firm,performing all of the legal services.This year,J&S generates taxable income of $100,000 from the active business operations,and also reports investment interest income of $22,000 and losses of $28,000 from a passive activity.As a result,J&S Legal Services,P.C.reports taxable income of

Question

Quizplus · Accepted Answer

The taxable income is calculated by adding the active business income ($100,000) and the investment interest income ($22,000), then subtracting the passive activity losses ($28,000), resulting in $122,000.

Jen and Saachi Are the Owners of J&S Legal Services,P