Zinc Corporation Is Created in the Current Year and Promptly

question 36

Essay

Zinc Corporation is created in the current year and promptly makes an S election. How much passive income can it earn this year without fear of losing its S corporation status or being subject to the Sec. 1375 tax on excess net passive income?

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Definitions:

Restatement

An authoritative secondary source providing a comprehensive summary of the common law and its applications in various legal cases.

Contentions

Disputes or arguments where there are disagreements between parties.

Restatement of Contracts

A set of model legal rules relating to contracts intended to clarify the principles of contract law and serve as a reference for judges and lawyers.

Preexisting Moral Obligation

A moral duty or responsibility that already exists before any new agreement or contract is made.