Assume the following S corporations and gross receipts, passive investment income, and corporate E&P. Will any of these corporations have its S election terminated due to excessive passive income? If so, in what year? All became S corporations at the beginning of year 1. (Leave no answer blank. Select "NA" if no effect.)

a. Clarion Corp.

	Gross		Passive Investment		Corporate Earnings
Year	Receipts		Income		and Profits
1	$	1,354,708	$	256,250	$	322,050
2	$	1,231,389	$	106,250	$	322,050
3	$	1,141,674	$	306,250	$	232,500
4	$	1,348,599	$	356,250	$	101,500
5	$	1,501,640	$	406,250	$	0