Joe received his Schedule K-1 (Form 1120-S) for the current tax year. It shows only the following: $2,000 in ordinary business income, $500 interest in income, $1,000 in net short-term capital gain, and $2,500 in net Section 1231 gain from the sale of business property. His adjusted basis at the beginning of the tax year was $20,000, and he did nothing else during the year to affect his basis. What amount from his Schedule K-1 is taxable income for Joe on his individual Form 1040 tax return?

Answer rating: 100% (QA)

To determine Joes taxable income from his Schedule K1 we need to understand the components of the K1 ... View the full answer