An S corporation with $50,000 of earnings and profits owns rental real estate and has interest income producing investments. For the last two years, 50%
An S corporation with $50,000 of earnings and profits owns rental real estate and has interest income producing investments. For the last two years, 50% of its gross receipts came from passive investment income and the corporation was subject to tax under IRC Section 1375. You have identified the possibility that the S status could be lost based on IRC 1362(d)(3).
IDENTIFY ONE ACTION THE CORPORATION COULD TAKE TO AVOID LOSS OF ITS S CORP STATUS?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To avoid losing its S corporation status the corporation should closely monitor the following fac...
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Step: 2
Step: 3
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Authors: kieso, weygandt and warfield.
14th Edition
9780470587232, 470587288, 470587237, 978-0470587287
