All of the outstanding stock of a closely held C corporation is owned equally by Evelyn Humo and Steve Bufusno. In 2011, the corporation generates taxable income of $20,000 from its active business activities. In addition, it earns $20,000 of interest from investments and incurs a $40,000 loss from a passive activity.
How much income does the C corporation report for 2011?
a. $10,000 of portfolio income
c. $20,000 of portfolio income
d. None of the above