Which of the following S corporations would be subject to the excess net passive income tax?
A) An S corporation with no earnings and profits from prior C corporation years and with passive investment income that exceeds 30% of its gross receipts.
B) An S corporation that has previously distributed all earnings and profits from prior C corporation years.
C) An S corporation with $2,000 of earnings and profits from prior C corporation years and with passive investment income that equals 22% of its gross receipts.
D) An S corporation that never operated as a C corporation.
E) None of the choices are correct.
Correct Answer:
Verified
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