Old Road, Inc., a calendar-year C corporation, made a valid S election effective 1/1/2022. Old Road,...

 

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Old Road, Inc., a calendar-year C corporation, made a valid S election effective 1/1/2022. Old Road, Inc. had been a C corporation until 2021 and had Accumulated E&P of $850,000 as of 12/31/2021. Its financial statements for the year ended 12/31/2022 showed the following information: Sales & Service Revenue $300,000 Interest Income 20,000 Dividend Income 30,000 Capital gain on sale of investments 75.000 Total Income $425,000 Operating Expenses (100,000) Expenses of maintaining investments (10,000) Net Income $315,000 Is Old Road Inc. subject to the Excess Net Passive Income Tax? Explain. If so, what is the amount of the tax Old Road, Inc. is liable for? Old Road, Inc., a calendar-year C corporation, made a valid S election effective 1/1/2022. Old Road, Inc. had been a C corporation until 2021 and had Accumulated E&P of $850,000 as of 12/31/2021. Its financial statements for the year ended 12/31/2022 showed the following information: Sales & Service Revenue $300,000 Interest Income 20,000 Dividend Income 30,000 Capital gain on sale of investments 75.000 Total Income $425,000 Operating Expenses (100,000) Expenses of maintaining investments (10,000) Net Income $315,000 Is Old Road Inc. subject to the Excess Net Passive Income Tax? Explain. If so, what is the amount of the tax Old Road, Inc. is liable for?

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Old Road Inc made an S corporation election effective 112022 As an S corporation it is subject to ce... View the full answer