RGD Corporation Was a C Corporation from Its Inception in 2012

question 89

Essay

RGD Corporation was a C corporation from its inception in 2012 through 2015. However, it elected S corporation status effective January 1, 2016. RGD had $50,000 of earnings and profits at the end of 2015. RGD reported the following information for its 2016 tax year.
What amount of excess net passive income tax is RGD liable for in 2016? (Round your answer for excess net passive income to the nearest thousand)

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Definitions:

Longevity

The length of an individual's life, often explored in the context of factors that contribute to a prolonged life span.

Selective Optimization

A strategy focusing on maximizing performance in some areas through the selection and optimization of resources, while minimizing losses in other areas.

Compensation

A concept that refers to making up for a deficiency in one area by excelling in another, or a payment made to someone for loss or suffering.

Healthy Approach

A method or strategy focused on promoting well-being and preventing diseases, involving balanced nutrition, regular physical activity, and mental health care.