Tom and Shawn Own All of the Outstanding Stock of Brady

Multiple Choice

Tom and Shawn own all of the outstanding stock of Brady Corporation (a retail store operated as a C corporation) .This year,Brady generates taxable income of $20,000 from active business operations,and also reports investment interest income of $22,000 and losses of $28,000 from a passive activity.As a result,Brady Corporation reports

A) net income of $42,000.
B) interest income of $22,000 and a passive loss carryover of $8,000.
C) business income of $20,000 and a passive loss carryover of $6,000.
D) business income of $20,000,interest income of $22,000,and a passive loss carryover of $28,000.