RGD Corporation was a C corporation from its inception in 2015 through 2019. However, it elected S corporation status effective January 1, 2020. RGD had $56,000 of earnings and profits at the end of 2019. RGD reported the following information for its 2020 tax year.
 

 What amount of excess net passive income tax is RGD liable for in 2019?

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Description Consulting revenue Salary to owners Employee wages Depreciation expense Municipal bond interest Amount $99,000 (40,000) (30,000) (5,000) 6,000 Interest income 42,000 25,000 $97,000 Dividend income Overall net income Description Consulting revenue Salary to owners Employee wages Depreciation expense Municipal bond interest Amount $99,000 (40,000) (30,000) (5,000) 6,000 Interest income 42,000 25,000 $97,000 Dividend income Overall net income

Answer rating: 100% (QA)

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