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

question 53

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.

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Definitions:

Job Turnover

The rate at which employees leave a workforce and are replaced by new employees.

Nominal Wage

The amount of money received by a worker per unit of time (hour, day, etc.); money wage.

Real Wage

The amount of goods and services a worker can purchase with his or her nominal wage; the purchasing power of the nominal wage.

Agency Shops

A workplace agreement where employees, whether or not they are union members, must pay union fees for the bargaining services the union provides.