An S corporation has the following information for its taxable year: Net ordinary income before the items below are considered $65,000 $$\begin{array} { l l }
\text { Salary to Z } & ( 18,000 ) \
\text { Rental income } & 22,000 \
\text { Rental expenses } & ( 29,000 ) \
\text { Net income } & \$ 40,000
\end{array}$$ Z, a 50 percent owner, performs services for the business.Z's self-employment income from the corporation, which is subject to self-employment tax, is

Question

An S corporation has the following information for its taxable year: Net ordinary income before the items below are considered $65,000 $$\begin{array} { l l } 
\text { Salary to Z } & ( 18,000 ) \
\text { Rental income } & 22,000 \
\text { Rental expenses } & ( 29,000 ) \
\text { Net income } & \$ 40,000
\end{array}$$ Z, a 50 percent owner, performs services for the business.Z's self-employment income from the corporation, which is subject to self-employment tax, is

Quizplus · Accepted Answer

S corporation income is not subject to self-employment tax, and salaries paid to owners are considered employee wages, not self-employment income.

An S Corporation Has the Following Information for Its Taxable