Owen and Jessica own and operate an S corporation. Each is a 50% owner. The business reports the following results: Business revenue$225,000Business expenses 88,000Investment expenses 16,000How do Owen and Jessica report these items for tax purposes?
A. $137,000 income on Schedule E; $88,000 investment expense on Schedule A
B. $68,500 income on Schedule E; $8,000 investment expense on Schedule A
C. $68,500 income on Schedule E; $16,000 investment expense on Schedule D
D. $225,000 income on Schedule E; $16,000 investment expense on Schedule A
Answer: B
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