C12-Chp-03-3-Outline of Code for AET and PHC

C12-Chp-03-3-Outline of Code for AET and PHC -...

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7db9c97e9c21ae350afd6860b6ed7a7d20caaa12.xls Subchapter G- Corps used to avoid tax on shareholders 1 531 Accumulated Earnings Tax 2 531 a What is the tax rate? What is the tax base? 3 532 Corporations subject to Accumulated Earnings Tax 4 532 a The forbidden purpose 5 532 b Exceptions: Accumulated earnings tax does not apply to PHC tax, etc 6 532 c Application determined without regard to no. of shareholders (can be a big corp.) 7 533 Evidence of purpose to avoid income tax 8 533 a Corporation has burden of proving it did not have the forbidden purpose 9 533 b Being a holding company is evidence of Purpose to avoid…. 10 534 Burden of Proof 11 534 a Burden of proof can be shifted to the government 12 535 Accumulated taxable income 13 535 a Accumulated taxable income is adjusted taxable income, less dividends paid deduction 14 535 b Adjust. to tax. income (Fed income tax, Charity Ded., Spec. Ded.-not 248, NOL, Cap loss) 15 535 c Accumulated earnings credit 16 535 c(1) Credit is equal to amount of earnings retained for reasonable needs
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