Jen and Saachi are the owners of J&S Legal Services, P.C., an incorporated law firm treated as a C corporation for tax purposes. Jen and Saachi work full-time in the firm, performing all of the legal services. This year, J&S generates taxable income of $100,000 from the active business operations, and also reports investment interest income of $22,000 and losses of $28,000 from a passive activity. As a result, J&S Legal Services, P.C. reports taxable income of
A. $122,000.
B. $94,000.
C. $100,000.
D. $97,000.
Answer: A
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