Business, 04.07.2020 22:01 carmen261

Barbara owns 40% of the stock of Cassowary Corporation (a C corporation) and 40% of the stock of Emu Corporation (an S corporation). In the current year, each corporation has operating income of $120,000 (before income tax expense) and tax-exempt interest income of $8,000. Neither corporation pays any dividends during the year. Since C corporations are separatable tax entities, Cassowary Corporation will report the operating income and tax-exempt income. An S corporation is a tax reporting entity. Therefore, Barbara will report ordinary business income of $and tax-exempt interest income of $on her individual return.

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Barbara owns 40% of the stock of Cassowary Corporation (a C corporation) and 40% of the stock of Emu...

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