Alex,Ellen and Nicolas Are Equal Partners in a Local Restaurant

Multiple Choice

Alex,Ellen and Nicolas are equal partners in a local restaurant.The restaurant reports the following items for the current year: Each partner receives a Schedule K-1 with one-third of the preceding items reported to him/her.How must each individual report these results on his/her Form 1040?

A) $100,000 income on Schedule E; $50,000 investment expense on Schedule A
B) $300,000 income on Schedule E; $150,000 investment expense on Schedule A
C) $300,000 income on Schedule E; $50,000 investment expense on Schedule A
D) $257,667 income on Schedule E; $50,000 investment expense on Schedule A