Rajib is the sole shareholder of Cardinal Corporation, a calendar year S corporation. In the current year, Cardinal generated a net profit of $350,000 ($520,000 gross income - $170,000 operating expenses) and distributed $80,000 to Rajib. Rajib must report the Cardinal Corporation profit of $350,000 on his Federal income tax return. True or false?

Question

Business

Elena Carey

20 October, 00:23

Rajib is the sole shareholder of Cardinal Corporation, a calendar year S corporation. In the current year, Cardinal generated a net profit of $350,000 ($520,000 gross income - $170,000 operating expenses) and distributed $80,000 to Rajib. Rajib must report the Cardinal Corporation profit of $350,000 on his Federal income tax return. True or false?

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Answers (1)

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Landyn Mckinney · Answer 1

True

Explanation:

Given that

Gross income = $520,000

Operating expenses = $170,000

So, the net income is

= Gross income - Operating expenses

= $520,000 - $170,000

= $350,000

The net income value or profit would be reported i. e $350,000 when the Rajib is filling his Federal income tax return.

Therefore, the given statement is true.