Kevin and Jennifer are 60% and 40% shareholders, respectively, in an S corporation.If the corporation reports $10,000 of nonseparately stated income and $2,000 of capital gain, how much is allocated to Jennifer?
A)$4,000 income only
B)$4,000 income and $2,000 of capital gain
C)$4,000 income and $800 of capital gain
D)$6,000 income and $2,000 of capital gain

Question

Quizplus · Accepted Answer

Jennifer's share of the nonseparately stated income is 40% of $10,000, which equals $4,000. Her share of the capital gain is also 40% of $2,000, which equals $800.

Kevin and Jennifer Are 60% and 40% Shareholders, Respectively, in an S