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Carrick Corp. met the stock ownership requirements of a personal holding company. What sources of income must Carrick consider to determine if the income requirements for a personal holding company have been met?
I. Interest earned on tax-exempt obligations
II. Dividends received from an unrelated domestic corporation
For personal holding companies (PHCs), income requirements only apply to rent, taxable interest, royalties, and/or dividends. Since interest on tax-exempt obligations is nontaxable, this would not apply to the income requirements.
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Answer Corp. has two common stockholders. Answer derives all of its income from investments in stocks and securities, and it regularly distributes 51% of its taxable income as dividends to its stockholders. Answer is a:
Personal holding companies (PHCs) are defined as being more than 50% owned by five or fewer individuals, and having 60% of AGI consisting of: rent, taxable interest, royalties, and/or dividends.
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Sleigh Corp. is a calendar year domestic personal holding company. Which deduction(s) must Sleigh make from Year 17 taxable income to determine undistributed personal holding company income prior to the dividend-paid deduction?
I. Federal income taxes
II. Net long-term capital gain (less related federal income taxes)
To assess the 20% tax on undistributed net income, taxable income must first be reduced by federal income taxes and net long-term capital gains to determine the personal holding company income prior to the dividend paid deduction.
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The personal holding company income test requires the company’s income for a given taxable year to be at least:
There are two criteria in determining whether a company is a personal holding company 1) more than 50% of the stock must be owned by 5 or fewer individuals and 2) at least 60% of the adjusted ordinary gross income must consist of certain investment income. The stock ownership test is 50% and income test is 60%.
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ABC Corp has 2 common stockholders. ABC derives all of its income from investments in stocks and securities, and it regularly distributed 51% of its taxable income as dividends to its stockholders. ABC is a:
Personal holding company status applies if a corporation is owned more than 50% by five or fewer individuals at any time during the last half of the tax year and if at least 60% of adjusted ordinary gross income for the tax year is personal holding company income.
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In order for an S Corp to have a valid election, the decision must be agreed upon by _____.
When dealing with a Subchapter S corporation, the election is only valid when agreed upon by all shareholders of the organization in writing.
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