Arnold is the President of Conrad Corporation.Arnold owns 30% of Conrad,which is organized as an S corporation.Arnold's salary is $100,000.Conrad reports the following for the current year:
$$\begin{array} { l r }
\text { Sales } & \$ 4,000,000 \
\text { Cost of goods sold } & ( 1,700,000 ) \
\text { Operating expenses } & ( 1,200,000 ) \
\text { Salaries (includes Arnold's salary) } & ( 600,000 ) \
\text { Capital loss } & \underline { ( 200,000 ) } \
\text { Net income } & \$ 300,000 \
\end{array}$$
Conrad Corporation pays $400,000 of dividends.Explain the effect of the above information on Arnold's taxable income.

Question

Arnold is the President of Conrad Corporation.Arnold owns 30% of Conrad,which is organized as an S corporation.Arnold's salary is $100,000.Conrad reports the following for the current year:
 $$\begin{array} { l r } 
\text { Sales } & \$ 4,000,000 \
\text { Cost of goods sold } & ( 1,700,000 ) \
\text { Operating expenses } & ( 1,200,000 ) \
\text { Salaries (includes Arnold's salary) } & ( 600,000 ) \
\text { Capital loss } & \underline { ( 200,000 ) } \
\text { Net income } & \$ 300,000 \
\end{array}$$ 
Conrad Corporation pays $400,000 of dividends.Explain the effect of the above information on Arnold's taxable income.

Quizplus · Accepted Answer

The Answer of Arnold is the President of Conrad Corporation.Arnold owns 30% of Conrad,which is organized as an S corporation.Arnold's salary is $100,000.Conrad reports the following for the current year:
 $$\begin{array} { l r } 
\text { Sales } & \$ 4,000,000 \
\text { Cost of goods sold } & ( 1,700,000 ) \
\text { Operating expenses } & ( 1,200,000 ) \
\text { Salaries (includes Arnold's salary) } & ( 600,000 ) \
\text { Capital loss } & \underline { ( 200,000 ) } \
\text { Net income } & \$ 300,000 \
\end{array}$$ 
Conrad Corporation pays $400,000 of dividends.Explain the effect of the above information on Arnold's taxable income.

Arnold Is the President of Conrad Corporation Conrad Corporation Pays $400,000 of Dividends