When an Employee/shareholder Receives an Income Allocation from an S

Multiple Choice

When an employee/shareholder receives an income allocation from an S corporation, what taxes apply to the income allocation?

A) FICA tax only.
B) Self-employment tax only.
C) FICA and self-employment tax.
D) None of these. This income will never be taxed.
E) None of these. This income will be taxed, but another type of tax will apply.