Earl and Sandra own and operate a restaurant as an S corporation. Each is a 50%...
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?
Group of answer choices
$82,000 income on Schedule E; $32,000 investment expense on Schedule A.
$480,000 income on Schedule E; $16,000 investment expense on Schedule A.
$41,000 income on Schedule E; $32000 investment expense on Schedule A.
$41,000 income on Schedule E; $16,000 investment expense on Schedule A.
Homework Answers
Eark and Sandra each owns a share of 50% and therefore they should share both the income and expenses in the ratio of 1:1.
Therefore Earl and Sandra should treat in their individual returns as $41,000 income on Schedule - E; $16,000 investment expense on Schedule A.
(82000/2 = 41000), (32000/2 = 16000)
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