An S Corporation Shareholder's Allocable Share of Business Income That

question 20

True/False

An S corporation shareholder's allocable share of business income that is determined to be from a passive activity is considered net investment income for purposes of the net investment income tax.

---

Definitions:

NPV

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows over a period of time.

MIRR

Modified Internal Rate of Return, a financial metric that accounts for the cost of capital and reinvestment of cash flows.

IRR

The interest rate at which the total present value of a project or investment's incoming and outgoing cash flows sum to zero.

WACC

A technique called Weighted Average Cost of Capital computes a firm’s cost of funds, taking into account the proportional weighting of various capital types.