Problem NO: 36

Wood Corporation was a C corporation in 2023 but elected to be taxed as an S corporation in 2024.  At the end of 2023, its earnings and profits were $

Wood Corporation was a C corporation in 2023 but elected to be taxed as an S corporation in 2024.  At the end of 2023, its earnings and profits were $15,500.  The following table reports Wood Corp.’s (taxable) income for 2024 (its first year as an S corporation).

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Wood Corporation

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Income Statement

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December 31, 2024

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Sales revenue

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$150,000

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Cost of goods sold

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(35,000)

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Salary to owners

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(60,000)

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Employee wages

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(50,000)

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Depreciation expense

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(4,000)

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Miscellaneous expenses

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(4,000)

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Interest income

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8,000

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Qualified dividend income

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2,000

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Overall net income

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$7,000

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What is Wood Corporation’s excess net passive income tax for 2024?

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