Juan Is the Sole Shareholder of an S Corporation,and Diego

Multiple Choice

Juan is the sole shareholder of an S corporation,and Diego owns a sole proprietorship.Both businesses,which were started in 2008,make a profit of $300,000 in 2008.Each owner withdraws $225,000 from his business during the year.Which of the following statements is correct?

A) Diego must report net profit from his business of $300,000 for 2008.
B) Juan must report dividend income of $300,000 for 2008.
C) Diego's proprietorship is required to pay tax on the $300,000 profit for 2008.
D) Juan's S corporation must pay tax on $300,000 for 2008.
E) None of the above.