Juanita owns 45% of the stock in a C corporation that had a profit of $120,000 in 2010. Carlos owns a 45% interest in a partnership that had a profit of $120,000 during the year. The corporation distributed $20,000 to Juanita, and the partnership distributed $20,000 to Carlos. Which of the following statements relating to 2010 is incorrect?
a. Juanita must report $20,000 of income from the corporation
b. The corporation must pay corporate tax on $120,000 of income
c. Carlos must report $20,000 of income from the partnership
d. The partnership is not subject to a Federal entity-level income tax.
e. None of the above