Flint, an S corporation with substantial AEP, reports operating revenues of $400,000, taxable interest income of $200,000, operating expenses of $175,000, and deductions attributable to the interest of $10,000. Calculate any excess passive investment income(ENPI) and the associated penalty tax payable. Round any division to four decimal places and use in subsequent calculations. Round your final answers to the nearest dollar.
Taxable income is the income on which tax is calculated by the government for the purpose of generating revenue for the government fundings.There are some deduction also which are deductible from the gross income of a person for arriving at taxable income.
Answer and Explanation: 1
1)Total gross receipts=operating revenue=interest income
Total gross receipts=400000+200000=600000
2)Net passive income=interest income- deduction...
See full answer below.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 3 / Lesson 5
In this lesson, we'll discuss allowable deductions that reduce taxable income. You'll learn about each deduction and its limitations. We'll also explore how to calculate tax liability after subtracting deductions.