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.

---

Definitions:

Organizational Culture Artifact

Tangible or visibly recognizable elements within an organization that reflect its culture, such as its language, rituals, symbols, stories, and physical arrangements.

Ceremony

A formal event conducted on important occasions, often involving ritualistic procedures or celebrations.

Ritual

A series of actions or type of behavior regularly and invariably followed by individuals, often with symbolic meaning.

Culture Clash

Occurs when individuals or groups from different cultural backgrounds come into conflict due to differing beliefs, values, norms, or behaviors.