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Flint, an S corporation with substantial AEP, reports operating revenues of $400,000, taxable...

Question:

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:

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

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1)Total gross receipts=operating revenue=interest income

Total gross receipts=400000+200000=600000

2)Net passive income=interest income- deduction...

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Income Tax: Tax Liability & Deductions

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Chapter 3 / Lesson 5
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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.


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