Business income allocations are subject to self-employment tax. Business income allocations are not subject to the net investment income tax. Business income allocations are subject to the additional Medicare tax.
Business income allocations are subject to self-employment tax. Business income allocations are not subject to the net investment income tax. Business income allocations are subject to the additional Medicare tax.
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 20DQ
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Question
Catherine is a 100-percent owner of CC LLC (taxed as an S corporation). She works full time for CC and her marginal ordinary tax rate is 37 percent. Which of the following statements is true regarding Catherine's tax treatment of business income allocated to him from CC?
Question 7 options:
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Business income allocations are subject to self-employment tax. |
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Business income allocations are not subject to the net investment income tax. |
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Business income allocations are subject to the additional Medicare tax. |
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Business income allocations are taxed at a maximum 23.8 percent tax rate. |
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