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Otis is the CEO of Rectify, Inc., a private foundation. Otis invests $500,000 (80%) of the...

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Accounting

Otis is the CEO of Rectify, Inc., a private foundation. Otisinvests $500,000 (80%) of the foundation's investment portfolio inhigh-risk derivatives. Previously, the $500,000 had been investedin corporate bonds with an AA rating that earned 4% per annum. Ifthe derivatives investment works as Otis's investment adviserclaims, the annual earnings could be as high as 20%.

Compute the amount of the initial tax, if any.

  1. The initial tax imposed on Rectify (if any) is $.
    The initial tax imposed on Otis (if any) is $

If the act causing the imposition of the tax is not addressedwithin the correction period, compute the additional tax, ifany.

  1. The additional tax for Rectify (if any) would be $.
    The additional tax for Otis (if any) would be $

that's the whole question from the homework

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1 Compute the amount of the initial tax if any2 If    See Answer
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