Earl and Sandra own and operate a restaurant as an S corporation.Each is a 50% owner.The business reports the following results for the year: Revenue $ 480,000
Business expenses 398,000
Investment expenses 32,000
How do Earl and Sandra report these items for tax purposes on each of their individual returns?

Question

Quizplus · Accepted Answer

Each owner reports half of the net business income ($82,000 total income - $32,000 investment expenses = $50,000 net income, so $25,000 each) and half of the investment expenses ($16,000 each) on their individual returns.

Earl and Sandra Own and Operate a Restaurant as an S