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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?
Group of answer choices
$82,000 income on Schedule E; $32,000 investment expense on Schedule A.
$480,000 income on Schedule E; $16,000 investment expense on Schedule A.
$41,000 income on Schedule E; $32000 investment expense on Schedule A.
$41,000 income on Schedule E; $16,000 investment expense on Schedule A.
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