Unformatted text preview: nal holding company.
Regulated investment company.
Corporation subject to the accumulated earnings tax.
Corporation subject to tax only on income not distributed to stockholders. CPA-02207
Choice "a" is correct. Personal holding company.
Rule: Personal holding company status applies if a corporation is owned more than 50% by five of 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 (which would include income from
investments in stocks and securities).
Choice "b" is incorrect. A regulated investment company is a corporation that is registered under the
Investment Company Act of 1940 and some venture capital companies. In order to qualify as a regulated
investment company, at least 90% of its gross income must be qualified investment source income. It
must distribute currently at least 90% of its dividend and interest income. The benefit of...
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- Fall '10
- The Land, Taxation in the United States, Educational Development Corp, Type1 M/C, Corr Ans