25. LO.6 In the current year, White, Inc., earns $400,000 from operations and receives

$36,000 of interest income from various portfolio investments. White also pays

$150,000 to acquire a 20% interest in a passive activity that produces a $200,000 loss.

a. Assuming that White is a personal service corporation, how will these transactions affect its taxable income?

b. Same as part (a), except that White is closely held but not a personal service corporation.