Josie Inc was a C Corporation from​ January1, 2016 through Deceber​ 31, 2019 . At December​ 31,2019 it had earnings​ & profits of​ $100,000. Josie Inc made an S Corporation election on January​ 1, 2020. During 2020​ , Josie Inc sold inventory to customers for ​ $ 2,000,000 and had interest income of​ $1,000,000 . Josie Inc incurred​ $100,000 of expenses related to earning the interest income and​ $800,000 of expenses related to its sale of inventory. What amount of excess net passive income tax does Josie Inc pay in​ 2020? A.​$47,250 B.​$21,000 C.​$189,000 D.​$52,500

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
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Josie Inc was a C Corporation from​ January1, 2016 through Deceber​ 31, 2019 . At December​ 31,2019 it had earnings​ & profits of​ $100,000. Josie Inc made an S Corporation election on January​ 1, 2020. During 2020​ , Josie Inc sold inventory to customers for ​ $ 2,000,000 and had interest income of​ $1,000,000 . Josie Inc incurred​ $100,000 of expenses related to earning the interest income and​ $800,000 of expenses related to its sale of inventory. What amount of excess net passive income tax does Josie Inc pay in​ 2020? A.​$47,250 B.​$21,000 C.​$189,000 D.​$52,500
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