Which statement is FALSE?

A - Deirdre is a sole proprietor. She will report her business income on Schedule C (Form 1040) and pay ordinary income tax and self-employment tax.

B - Mary Lou is a limited partner, She does not perform any services for the partnership, but receives guaranteed payments. The partnership will report her

share of income on Schedule K-1 (Form 1065). Mary Lou will pay income tax on the entire amount. She will not pay self-employment tax.

C - Carlos is a shareholder in a S corporation. He own 15% of the shares and does not perform services for the company. The company will report his share of

income on Schedule K-1 (Form 1120-S) Carlos will not pay self-employment tax on his share of the ordinary income.

D - Antonio is a shareholder in a C corporation. He own 55% of the shares and performs services for the company. His wages will be reported

on Form W-2, and his share of the company's ordinary income will be reported to him on Schedule K-1 (Form 1120)

Answer rating: 100% (QA)

Answer is as follow The answer is Option C Explanation Carlos is a ... View the full answer