5.
Award: 2.80 points
At the beginning of the year, Clampett, Inc. had $100,000 in its AAA, $60,000 of earnings and
profits from prior C corporation years. During the year, Clampett, Inc. earned $50,000 of
ordinary income and paid $200,000 in distributions to its shareholders. Assume that J. D. owns
25% of Clampett, Inc, his basis in Clampett, Inc. at the beginning of the year is $10,000, and his
share of the distribution was $50,000. How much income does J. D. recognize this year from
these transactions?
? $0.
? $10,000.
$17,500.
? $40,000.
6.
Award: 2.80 points
Assume that Clampett, Inc. has $200,000 of sales, $150,000 of cost of goods sold, $60,000 of
interest income, and $40,000 of dividends. What is Clampett, Inc.'s excess net passive income?
? $0.
? $25,000.
? $75,000.
$100,000.
7.
Award: 2.80 points
Assume that Clampett, Inc. has $200,000 of sales, $150,000 of cost of goods sold, $60,000 of
interest income, and $40,000 of dividends. Assume that Clampett, Inc. never operated as a C
corporation and that the corporate tax rate is 35%, What is Clampett, Inc.'s excess net passive
income tax?
$0
$25,000
$75,000.
$100,000.
