RGD Corporation Was a C Corporation from Its Inception in 2013

question 118

Essay

RGD Corporation was a C corporation from its inception in 2013 through 2017. However, it elected S corporation status effective January 1, 2018. RGD had $50,000 of earnings and profits at the end of 2017. RGD reported the following information for its 2018 tax year.
What amount of excess net passive income tax is RGD liable for in 2018? Assume the corporate tax rate is 21%. (Round your answer for excess net passive income to the nearest thousand).

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Definitions:

Thomas E. Dewey

An American politician who served as the Governor of New York and was the Republican candidate for the U.S. Presidency in 1944 and 1948, famously losing the latter in a close race to Harry S. Truman.

New York Governor

The chief executive of the State of New York, responsible for enforcing state laws and overseeing the operation of the state government.

Colonialism

The policy or practice of acquiring full or partial political control over another country, occupying it with settlers, and exploiting it economically.

Franklin D Roosevelt

The 32nd President of the United States, who served four terms from 1933 to 1945 and led the country during the Great Depression and World War II.