Alvin is the sole shareholder of an S corporation that earned $200,000 in 2017 and distributed $75,000 to Alvin. Alvin must recognize $75,000 as income from the S corporation in 2017.

Question

Quizplus · Accepted Answer

Alvin must recognize the entire $200,000 as income from the S corporation in 2017, not just the $75,000 distributed, because S corporation income is passed through to shareholders regardless of distributions.

Alvin Is the Sole Shareholder of an S Corporation That