Question
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
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 |
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
