Passive Income Tax. Oliver organized North Corporation 15 years ago. The corporation made an S election last year after it accumulated $60,000 of E&P as a C corporation. As of December 31 of the current year, the corporation has distributed none of its accumulated E&P. In the current year, North reports the following results: Dividends from domestic corporations Rental income Services income Expenses related to rental income Expenses related to services income Other expenses 60,000 100,000 50,000 30,000 15,000 5,000 The corporation has not provided significant services nor incurred substantial costs in connection with earning the rental income. The services income is derived from the active conduct of a trade or business a. Is North subject to the excess net passive income tax? If so, what is its tax liability? b. What is the effect of the excess net passive income tax liability on North's pass- throughs of ordinary income and separately stated items? c. What advice would you give North regarding its activities