A client received an annual salary from his employment of $40,000. He was a 50% owner of both a C Corporation and an S Corporation. The C Corporation had net profits of $20,000 and the S Corporation had income of $10,000. Neither corporation made a distribution. The client’s revocable trust had income of $5,000 but made no distributions. What was the client’s gross income for the year?

  1. $40,000
  2. $45,000
  3. $50,000
  4. $60,000