Wood Corporation was a C corporation in 2018 but elected to be taxed as an S corporation

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Wood Corporation was a C corporation in 2018 but elected to be taxed as an S corporation in 2019. At the end of 2018, its earnings and profits were $15,500.

The following table reports Wood Corp.’s (taxable) income for 2019 (its first year as an S corporation)

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What is Wood Corporation’s excess net passive income tax for 2019?

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McGraw Hills Essentials Of Federal Taxation 2020 Edition

ISBN: 9781260433128

11th Edition

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

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Question Posted: Mar 18, 2024 03:18 AM

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Wood Corporation was a C corporation in 2018 but elected to be taxed as an S corporation

Question:

Wood Corporation Income Statement December 31, 2019 $150,000 (35,000) (60,000) (50,000) (4,000) Sales revenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income (4,000) 8,000 Qualified dividend income 2,000 Overall net income $ 7,000

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McGraw Hills Essentials Of Federal Taxation 2020 Edition

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