S corporation Termination test

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Assume the following S corporations, gross receipts, passive investment income, and corporate E&P. 
All became S corporations at the beginning of year 1.

Will any of these corporations have their S election terminated due to excessive passive income? If so, in what year? 

Corp A.

 GrossPassive InvestmentPassive income rate Corporate Earnings
YearReceiptsIncomeand Profits
11,357,208268,75019.80%323,550
21,233,389118,7509.63%323,550
31,146,234318,75027.81%237,500
41,351,719368,75027.28%104,500
51,504,240418,75027.84%0

Corp A exceeds the 25% benchmark for 3 consecutive years, but on year 5 does not report earnings/profits so will not be terminated
 
Corp B
 GrossPassive InvestmentPassive income rate Corporate Earnings
YearReceiptsIncomeand Profits
11,434,500265,00018.47%140,589
2703,380218,00030.99%103,000
3853,050199,00023.33%103,000
4834,950228,00027.31%82,250
51,004,285275,39027.42%82,250

Corp B exceeds the 25% benchmark for only 2 consecutive years, reports earnings/profits all 5 years so will not be terminated

Corp C
 GrossPassive InvestmentPassive income rate Corporate Earnings
YearReceiptsIncomeand Profits
11,005,558263,50026.20%0
2706,750313,98044.43%0
3803,150413,87051.53%0
4902,320363,97040.34%0
5677,500303,87744.85%0

Corp C does not report earnings/profits all 5 years so exceeds the 25% benchmark no need to be checked, will not be terminated

Corp D
 GrossPassive InvestmentPassive income rate Corporate Earnings
YearReceiptsIncomeand Profits
11,104,720265,00023.99%$725 
2998,750247,50024.78%625
3802,600245,00030.53%525
4806,750229,57028.46%425
5754,500215,00028.50%325

Corp D exceeds the 25% benchmark for 3 consecutive years (Years 3,4,5) and reports earnings/profits all 5 years so will not be terminated on day 1 of Year 6


Currently, I am an MBA student at EIU. This blog will follow my studies in Corporate taxation

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