Jennifer owns 60% of the stock in Heath Corporation. During the current year, Heath Corporation has taxable income of $80,000 and pays dividends of $30,000. Which of the following statements about Jennifer's income from Heath Corporation is/are correct? I. If Heath Corporation is an S corporation, Jennifer must recognize $48,000 of income. II. If Heath Corporation is a corporation, Jennifer must recognize $18,000 of income. a. Only statement I is correct. b. Only statement II is correct. c. Both statements are correct. d. Neither statement is correct.
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