Passive Investment Income Penalty Tax

Passive Investment Income Penalty Tax

Passive Investment Income Penalty Tax means:
a tax imposed on the excess passive activity income of an S corporation that has accumulated earnings and profits.

from Subchapter C years. The highest corporate rate is applied to the S corporation's excess net passive income, as follows:

Passive investment income in excess of 25% of gross receipts for the year x income for Passive investment income for the year.

The tax is paid by the S corporation. The amount subject to the tax may not exceed the taxable income of the S corporation. Former IRC (check if this IRC provision is current here) §1375.


Posted

in

by

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *