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Flashcards in S Corps 2 Deck (3):
1

Whats the deal with the built in gains tax?

A C corp converts to an S corp and the gain on the date of conversion, when you sell it that portion gets tax at the 35% rate.

2

What's the special tax on S corp excess net passive income.
35% or 39.6%

35%
I wonder what the 39.6% is on.

3

S Corp tax on Net Passive Income what factors determine?
______ % of __________
Some type of earnings
Type of entity it is

Passive income rules only apply to S corps that were C Corps
25% or more of gross receipts is passive
Does it have C earnings and profits at end of tax year

may be more here is it more than 3 years for the 25%