RGD Corporation Was a C Corporation from Its Inception in 2012

question 28

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:

Yield Curve

A line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.

Normal Yield Curve

A graphical representation that shows interest rates on bonds of different maturities tend to increase the longer the term to maturity, under normal market conditions.

Expected Inflation

The anticipated rate at which the general level of prices for goods and services will rise over a period.

Expectations Theory

A theory that explains the term structure of interest rates based on the anticipation that the rates will move toward the average rate over the long term.