Gray, Inc., a private foundation, reports the following items of income and deductions.
|
Interest income |
$ 29,000 |
|
Rent income |
61,000 |
|
Dividend income |
15,000 |
|
Royalty income |
22,000 |
|
Unrelated business income |
80,000 |
|
Rent expenses |
(26,000) |
|
Unrelated business expenses |
(12,000) |
Gray is not an exempt operating foundation, and it is not eligible for the 1% tax rate.
a. Calculate the net investment income.
b. Calculate the tax on net investment income.
c. What is the purpose of the tax on net investment income?