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Joe received his Schedule K-1 (Form 1120-S) for the current tax year. It shows only the following: $2,000 in ordinary business income, $500 in interest
Joe received his Schedule K-1 (Form 1120-S) for the current tax year. It shows only the following: $2,000 in ordinary business income, $500 in interest income, $1,000 in net short- term capital gain, and $2,500 in net Section 1231 gain from the sale of business property. His adjusted basis at the beginning of the tax year was $20,000, and he did nothing else during the year to affect his basis. What amount from his Schedule K-1 is taxable income for Joe on his individual Form 1040 tax return?
a) $6,000 b) $2,500 c) $4,000 d) $3,500
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