C12-Chp-03-4-Worksheet-PHC Tax

C12-Chp-03-4-Workshe - Undistributed PHCI-before Div 173,750-Current year dividends 75,000-Consent dividends-2-1/2-month-dividends(75,000 =

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f22694c6475446c08a0744bfd2e3d023bfc8b550.xls Personal Holding Company Tax In the current year, Local Corporation (which is a PHC) had these Results: Taxable Income $200,000 Included above: Dividend income (from an 18% domestic corp.) 50,000 Dividends paid by Local Corporation 75,000 1. What is Local Corporation's federal income tax liability? 2. What is Local Corporation's PHC tax liability? 3. What actions can be taken after year-end (before filing the return) to eliminate the PHC liability? After it files the return? + Taxable income 200,000 + Dividends received deduction 35,000 + NOL-Sec.172 + Contribution carryover 35,000 = Subtotal 235,000 - Federal Income Tax 61,250 - Excess contributions (over 10%) - Net cap. gain less tax thereon (61,250) =
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Unformatted text preview: Undistributed PHCI-before Div. 173,750 -Current year dividends 75,000 -Consent dividends-2-1/2-month-dividends (75,000) = Undistributed PHC Income 98,750 X Tax Rate 15% = PHC tax liability $14,813 1 Charitable contributions are limited to 10% of adjusted taxable income for regular tax purposes, but the limit does not apply for PHC computations. Additional current year contributions may be allowed for PHC tax purposes, but regular tax contribution carryforwards are eliminated if they were deducted for PHC tax purposes in a prior year. 2 Capital gains are reduced by related income taxes to prevent a double benefit from those taxes. 3 This worksheet does not show all adjustments that may be necessary...
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This note was uploaded on 03/09/2012 for the course ACCT 6120 taught by Professor Godfrey,h during the Spring '08 term at UNC Charlotte.

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