ABC Corp Elected to Be Taxed as an S Corporation When

question 130

Essay

ABC Corp. elected to be taxed as an S Corporation when it was initially formed. During its first three years of existence, it reported passive investment income in excess of 25 percent of its gross receipts. Is ABC's S election terminated under the excess passive investment income test? If so, what is the effective date of the termination? If not, why not?

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Definitions:

Collapse Button

A user interface element that allows users to hide or minimize sections of content or panels to reduce on-screen clutter or focus on specific areas.

PivotTable

A data summarization tool found in data visualization programs such as Microsoft Excel that allows users to create table reports from complex data sets.

Product Type Field

A database or form field designated to categorize products according to their nature, characteristics, or function in a systematic fashion.

PivotTable

An interactive table in spreadsheet applications that enables the analysis, summarization, and organization of data to obtain useful insights.