Mason owns 45% of an S corporation that reported net income of $105,000 for the year.During the year, $20,000 was distributed to Mason from the corporation.How much should Mason include in his gross income for the year?
A)$20,000
B)$47,250
C)$56,250
D)$67,250

Question

Quizplus · Accepted Answer

Mason should include $47,250 in his gross income, which is 45% of the S corporation's net income of $105,000. S corporation income is passed through to the shareholders and taxed on their individual tax returns, regardless of whether it is distributed.

Mason Owns 45% of an S Corporation That Reported Net