Pepper,Inc

question 125

Multiple Choice

Pepper,Inc.,an S corporation,holds a $1 million balance in accumulated E&P.It reports sales revenues of $400,000,taxable interest of $380,000,operating expenses of $250,000,and deductions attributable to the interest income of $140,000.What is Pepper's passive income penalty tax payable,if any?

• A)$380,000.
• B)$185,000.
• C)$40,895.
• D)​$0.

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