Assignment task: SKS Inc., originally a C corporation with accumulated earnings and profits, elected three years ago, to be an S corporation. In the current tax year, gross receipts total $80,000, including $20,000 of passive investment income ($5,000 interest and $15,000 dividends). Expenditures directly connected with production of the passive investment income total $1,000 in broker fees. In addition, SKS has $30,000 in non-separately stated business deductions. (Round to the nearest dollar.)
This is a four-part question.
Question 1: What amount of excess net passive income does SKS have in the current tax year?
Question 2: What amount of excess net passive income (ENPI) tax does SKS owe?
Question 3: What amount of interest is reported on Schedule K (Form 1120-S) as passed through to the shareholders?
Question 4: What amount of dividends is reported on Schedule K (Form 1120-S) as passed through to the shareholders?
a) $9,500; $3,325; $4,169; $12,506
b) $4,750; $1,663; $4,584; $13,753
c) $2,850; $ 998; $4,750; $14,251
d) $ 0; $ 0; $5,000; $15,000