Earl and Sandra Own and Operate a Restaurant as an S

Multiple Choice

Earl and Sandra own and operate a restaurant as an S corporation.Each is a 50% owner.The business reports the following results for the year: $\begin{array}{lr}\text { Revenue } & \$ 480,000 \\\text { Business expenses } & 398,000 \\\text { Investment expenses } & 32,000\end{array}$ How do Earl and Sandra report these items for tax purposes on each of their individual returns?

A) $41,000 income on Schedule E;$16,000 investment expense on Schedule A.
B) $41,000 income on Schedule E;$32000 investment expense on Schedule A.
C) $82,000 income on Schedule E;$32,000 investment expense on Schedule A.
D) $480,000 income on Schedule E;$16,000 investment expense on Schedule A.