Neal Corporation was initially formed as a C corporation with a calendar year end.Neal elected S corporation status,effective January 1,2017.On December 31,2016,Neal Corp.reported earnings and profits of $150,000.Beginning in 2017,Neal Corp.reported the following information.Does Neal Corp.'s S election terminate due to excess net passive income? If so,what is the effective date of the termination?

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The Answer of Neal Corporation was initially formed as a C corporation with a calendar year end.Neal elected S corporation status,effective January 1,2017.On December 31,2016,Neal Corp.reported earnings and profits of $150,000.Beginning in 2017,Neal Corp.reported the following information.Does Neal Corp.'s S election terminate due to excess net passive income? If so,what is the effective date of the termination?

Neal Corporation Was Initially Formed as a C Corporation with a Calendar