S Corporation Subject to the Net Passive Income Tax - IRS Form 1120-S Reporting

If an S corporation generates passive income apart from its ordinary trade or business income, the S corporation may be subject to taxes directly on the net passive income.

The tax applies to S corporations that were previously taxed as a C corporation, and have accumulated earnings and profits carried over from when it was a C corporation.

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DISCLAIMER: I am a licensed attorney and certified public accountant (CPA) in the State of Florida. I am not a financial advisor. The information provided in this video is for entertainment purposes only. No such communication is provided in the course of an attorney-client relationship, and no communication is intended to constitute legal advice. You should speak with your own tax and legal professionals to discuss your circumstances before performing any of the tax, legal or accounting strategies demonstrated in this video. Thank you.