Neal Corporation was initially formed as a C corporation with a calendar year-end. Neal elected S corporation status, effective January 1, 2019. On December 31, 2018, Neal Corp. reported earnings and profits of $150,000. Beginning in 2019, Neal Corp. reported the following information. Does Neal Corp.'s S election terminate due to excess net passive income? If so, what is the effective date of the termination?
Definitions:
Muscle Fiber
A single, elongated muscle cell that contracts to produce movement.
Myosin Filament
A protein filament that, along with actin, plays a role in muscle contraction and cell movement.
Actin Filament
A protein filament that, along with myosin, plays a key role in muscle contraction and is involved in various types of cell movement and structure.
Acetylcholine
A neurotransmitter in the nervous system that plays a crucial role in muscle movement and various brain functions.
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