RGD Corporation Was a C Corporation from Its Inception in 2014

question 134

Essay

RGD Corporation was a C corporation from its inception in 2014 through 2017.However,it elected S corporation status effective January 1,2018.RGD had $50,000 of earnings and profits at the end of 2017.RGD reported the following information for its 2018 tax year.
$\begin{array}{lr}\text { Description }&\text { Amount }\\\text { Consulting revenue } & \$ 130,000 \\\text { Salary to owners } & (50,000) \\\text { Employee wages } & (40,000) \\\text { Depreciation expense } & (8,000) \\\text { Interest income } & 50,000 \\\text { Dividend income } & \underline {40,000} \\\text { Overall net income }&\underline {\$ 122,000}\end{array}$  
What amount of excess net passive income tax is RGD liable for in 2018? (Round your answer for excess net passive income to the nearest thousand).

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