Assume that Clampett, Inc., has $200,000 of sales, $150,000 of cost of goods sold, $60,000 of interest income, and $40,000 of dividends.Assume that Clampett, Inc., never operated as a C corporation and that the corporate tax rate is 21 percent.What is Clampett, Inc.'s excess net passive income tax?

Question

Quizplus · Accepted Answer

Clampett, Inc.'s excess net passive income tax is $0 because the company has not operated as a C corporation, and the concept of excess net passive income tax applies to S corporations that have previously been C corporations and have accumulated earnings and profits. Clampett, Inc. does not fit this scenario, so it would not be subject to this tax.

Assume That Clampett, Inc