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: Revenue $ 480,000
Business expenses 398,000
Investment expenses 32,000
How do Earl and Sandra report these items for tax purposes on each of their individual returns?

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