Compute any passive investment income tax penalty

Assignment Help Accounting Basics

Reference no: EM1394377

Sweetwater Inc is an Small corporation.

a.In 2012 Sweetwater's excess net passive income is $42,000. Sweetwater holds $31,000 of accumulated earnings and profits from a C corporation year. It reports $58,000 of taxable income and AMT adjustments of of $17,000 for the year. Calculate any passive investment income tax penalty.

b. In part (a), what if taxable income were $39,000?

c. If this will be the third consective year the company may be subject to the penalty tax on excessive passive investment income, what could Sweetwater do before the end of year to avoid the tax?

Reference no: EM1394377

Questions Cloud

Proteoglycan and collagen components of cartilage contribute : What do the proteoglycan and collagen components of cartilage contribute to connective tissue? Explain the mechanical reason the gel-like aggregates of proteoglycan are important to the knee.

Discuss some potential ethical mishandlings : Classify also discuss some potential ethical mishandlings when it comes to cross selling, like targeting a demographic more likely to accept the suggested purchase like the elderly.

Where do you stand on this issue : Some courts hold which an engagement rings is a conditional gift which becomes an absolute (effective) gift only on marriage. Other courts conclude which when an engagement ring is provided to the Peter, the Peter should have full ownership rights..

How hrm practices align with company-s business strategy : Find out if and how HRM practices align with company's business strategy. Explain how hiring more women and promoting them could enhance competitive advantage of this company.

Compute any passive investment income tax penalty : In 2012 Sweetwater's excess net passive income is $42,000. Sweetwater holds $31,000 of accumulated earnings and profits from a C corporation year.

Explain why do applicants flock to work at quirky industry : The industry's motto is to "hire for attitude, train for skills." Do you think most industries could adopt this motto? Explain why or explain why not? Make sure to comprise a suitable introduction also summary for your paper.

Determine rna code after transcription : Part of a gene that codes for a small protein has the following base sequence: CTTACACGCGCGATTGACT. What would the RNA code be after transcription?

Concepts for statistics : Using the table below, compare and contrast the main differences between two quantitative research designs and two qualitative research designs.

Designing an experimental study : I have been approached by a pharmaceutical company that has developed a new drug, which is supposed to be effective in the treatment of schizophrenia.

User Account

All Pages