RGD Corporation Was a C Corporation from Its Inception in 2014

question 44

Essay

RGD Corporation was a C corporation from its inception in 2014 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? (Round your answer for excess net passive income to the nearest thousand).

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Definitions:

First Class

The highest quality of service or seating available, typically offering more space, comfort, and amenities, often found in transportation and accommodations.

Second Class

A category of service or ticket in transportation or other services that is below the highest level in terms of amenities and cost.

Miles Traveled

The total distance covered or traveled, often used in contexts like transportation studies, expense calculations, or travel statistics.

Perfect Substitutes

are goods that can be completely exchanged for one another at a constant rate of substitution and possess identical levels of utility and functionality for consumers.