Question 1 (10 points)\

Saved\ Review the tax return for the business (Form 1120S) and the K1 for Morty. Jerry decides that no distributions will be made, and since he has

52%

of the vote, it appears that he has majority vote. For this question, assume that the operating agreement says that distributions will be voted on based on Membership Ownership percentage. Which of the following is true.\ Morty will be allocated

$90,000

of income that will be taxed on his individual tax return.\ The business will pay income tax on

$90,000

of income.\ Morty will be allocated

$21,600

of income that will be taxed on his individual tax return.\ The business will distribute

$21,600

of cash to Morty.

Review the tax return for the business (Form 1120S) and the K1 for Morty. Jerry decides that no distributions will be made, and since he has 52% of the vote, it appears that he has majority vote. For this question, assume that the operating agreement says that distributions will be voted on based on Membership Ownership percentage. Which of the following is true. Morty will be allocated $90,000 of income that will be taxed on his individual tax return. The business will pay income tax on $90,000 of income. Morty will be allocated $21,600 of income that will be taxed on his individual tax return. The business will distribute $21,600 of cash to Morty. Review the tax return for the business (Form 1120S) and the K1 for Morty. Jerry decides that no distributions will be made, and since he has 52% of the vote, it appears that he has majority vote. For this question, assume that the operating agreement says that distributions will be voted on based on Membership Ownership percentage. Which of the following is true. Morty will be allocated $90,000 of income that will be taxed on his individual tax return. The business will pay income tax on $90,000 of income. Morty will be allocated $21,600 of income that will be taxed on his individual tax return. The business will distribute $21,600 of cash to Morty