An S Corporation with Substantial AEP Has Operating Revenues of $410,000

question 103

Multiple Choice

An S corporation with substantial AEP has operating revenues of $410,000, taxable interest income of $390,000, operating expenses of $260,000, and deductions attributable to the interest of $150,000. The passive income penalty tax payable, if any, is:

• A) $0.
• B) $40,923.
• C) $116,923.
• D) $136,500.
• E) None of the above.

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Definitions:

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Punishment

An adverse event or outcome that decreases the likelihood of a behavior being repeated in the future.

Operant Conditioning

Learning resulting from the response an organism receives following a behavior.

Negative Reinforcement

A form of conditioning where a response is strengthened by stopping, removing, or avoiding a negative outcome or aversive stimulus.