Wood Corporation was a C corporation in 2021 but elected to be taxed as an S corporation in 2022. At the end of 2021, its earnings and profits were $20,500. The following table reports Wood Corporation's (taxable) income for 2022 (its first year as an S corporation). Wood Corporation Income Statement December 31, 2022 Sales revenue $ 200,000 Cost of goods sold (45,000) Salary to owners (80,000) Employee wages (66,000) Depreciation expense (8,000) Miscellaneous expenses (8,000) Interest income 14,000 Qualified dividend income 4,000 Overall net income $ 11,000 What is Wood Corporation's excess net passive income tax for 2022?
Wood Corporation was a C corporation in 2021 but elected to be taxed as an S corporation in 2022. At the end of 2021, its earnings and profits were $20,500. The following table reports Wood Corporation's (taxable) income for 2022 (its first year as an S corporation). Wood Corporation Income Statement December 31, 2022 Sales revenue $ 200,000 Cost of goods sold (45,000) Salary to owners (80,000) Employee wages (66,000) Depreciation expense (8,000) Miscellaneous expenses (8,000) Interest income 14,000 Qualified dividend income 4,000 Overall net income $ 11,000 What is Wood Corporation's excess net passive income tax for 2022?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Wood Corporation was a C corporation in 2021 but elected to be taxed as an S corporation in 2022. At the end of 2021, its earnings and profits were $20,500. The following table reports Wood Corporation's (taxable) income for 2022 (its first year as an S corporation).
| Wood Corporation | |
| Income Statement | |
| December 31, 2022 | |
| Sales revenue | $ 200,000 |
|---|---|
| Cost of goods sold | (45,000) |
| Salary to owners | (80,000) |
| Employee wages | (66,000) |
| (8,000) | |
| Miscellaneous expenses | (8,000) |
| Interest income | 14,000 |
| Qualified dividend income | 4,000 |
| Overall net income | $ 11,000 |
What is Wood Corporation's excess net passive income tax for 2022?
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