Which of the Following S Corporations Would Be Subject to the Excess

question 130

Multiple Choice

Which of the following S corporations would be subject to the excess net passive income tax?

• A)An S corporation that never operated as a C corporation.
• B)An S corporation that has previously distributed all earnings and profits from prior C corporation years.
• C)An S corporation with no earnings and profits from prior C corporation years and with passive investment income that exceeds 30percent of its gross receipts.
• D)An S corporation with $2,000 of earnings and profits from prior C corporation years and with passive investment income that equals 22percent of its gross receipts.
• E)None of the choices are correct.

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