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24 August, 00:57

Rachel is the sole member of an LLC, and Jordan is the sole shareholder of a C corporation. Both businesses were started in the current year, and each business has a long-term capital gain of $10,000 for the year. Neither business made any distributions during the year. With respect to this information, which of the following statements is correct?

A. The C corporation receives a preferential tax rate on the LTCG of $10,000.

B. Rachel must report $10,000 of LTCG on her tax return.

C. The LLC must pay corporate tax on taxable income of $10,000.

D. Jordan must report $10,000 of LTCG on his tax return.

E. None of these choices are correct.

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Answers (1)
  1. 24 August, 04:05
    0
    B)

    Explanation:

    Rachel must report $10,000 of LTCG on her tax return. (Long-term capital gains)
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