Based on the fact that Randolph Scott is a sole proprietor, the net profit for tax purposes needs to be reported on A. Schedule C, Statement of Profit or Loss from Business.
The financial business activities of a sole proprietor are treated as the same as their personal activities for the purposes of taxation because a sole proprietor is not separated from their business.
This means that profits and losses to the sole proprietor would go to Schedule C on their tax forms.
This is form is used to denote the Statement of Profit and Loss which means that it is where business profits will go.
The net profit to Randolph will not go to Form 1040 as other income because net income is the main income of the business.
It is also not to be considered rent or income from royalityes and so it will not go to Schedule E.
As a sole proprietor is not separable from their business, the net income to Randolph will not go to a separate tax return which is prepared for business operations.
In conclusion, option A, Schedule C, Statement of Profit or Loss from Business, is correct.
Options include:
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