Pepper,Inc.,an S corporation,holds a $1 million balance in accumulated E&P.It reports sales revenues of $400,000,taxable interest of $380,000,operating expenses of $250,000,and deductions attributable to the interest income of $140,000.What is Pepper's passive income penalty tax payable,if any?
A) $380,000.
B) $185,000.
C) $40,895.
D) $0.
Correct Answer:
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