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

question 85

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 30% 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 22% of its gross receipts.
• E)None of these

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Definitions:

Aggravated Assault

is a physical attack on someone that results in serious bodily injury, often involving the use of a weapon or other means to increase harm.

Deadly Weapon

An object that can cause death or serious bodily injury, either designed for that purpose or used in a way that can inflict harm.

Capital Punishment

A legal penalty where a person is put to death by the state as a punishment for a crime.

Deterrent

A factor or consideration that discourages certain behaviors or actions through the fear of consequences.