Gray, Inc., a private foundation, reports the following items of income and deductions. Gray is not an exempt operating foundation, and it is not eligible for the 1% tax rate.
Interest income..................................$ 29,000
Rent income.......................................61,000
Dividend income.................................15,000
Royalty income...................................22,000
Unrelated business income......................80,000
Rent expenses...................................(26,000)
Unrelated business expenses..................(12,000)
a. Calculate the net investment income.
b. Calculate the tax on net investment income.
c. What is the purpose of the tax on net investment income?