RGD Corporation was a C corporation from its inception in 2014 through 2018. However, it elected S corporation status effective January 1, 2019. RGD had $50,000 of earnings and profits at the end of 2018. RGD reported the following information for its 2019 tax year.
What amount of excess net passive income tax is RGD liable for in 2019? Assume the corporate tax rate is 21%.
Definitions:
Business Products
Products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products.
Indirect Marketing Channel
A pathway of distribution involving one or more intermediaries (such as wholesalers or retailers) between the producer and the consumer.
Intermediaries
Entities or individuals that act as a middleman in the distribution chain between producer and end-user, facilitating transactions or dissemination of products.
Distribution
The process by which goods are transported from the producer or supplier to the consumer or retail outlet.
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