Assignment task: CPC Inc., a C corporation with accumulated earnings and profits, elected to be an S corporation four years ago. In the current tax year, gross receipts total $200,000, which included $80,000 of passive investment income ($30,000 dividends and $50,000 from rents). Since CPC is in the electronics business, all rental income is passive. Expenditures directly connected with production of the passive investment income total $39,000, consisting of $4,000 in broker fees and $35,000 in rental expenses. CPC also has $90,000 in non-separately stated business deductions and $5,000 in charitable contributions. (Round to the nearest dollar.)
This is a four-part question.
Question 1: What amount of excess net passive income does CPC have in the current tax year?
Question 2: What amount of excess net passive income (ENPI) tax does CPC owe?
Question 3: What amount of dividends is reported on Schedule K (Form 1120-S) as passed through to the shareholders?
Question 4: What amount of net rental real estate income is reported on Schedule K (Form 1120-S) as passed through to the shareholders?
a) $30,000; $10,500; $26,062; $ 8,438
b) $50,000; $17,500; $23,437; $ 4,063
c) $15,375; $ 3,229; $28,789; $12,982
d) $ 0; $ 0; $30,000; $15,000