Cpa 02238 type1 mc 117 cpa 02238 a d nov 91 ii 44 corr

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Unformatted text preview: ut not paid by Hull to its stockholders $100,000 20,000 10,000 In computing its 1990 personal holding company tax, what amount should Hull deduct for dividends paid? a. b. c. d. $0 $10,000 $20,000 $30,000 CPA-02234 Explanation Choice "d" is correct. In computing its 1990 personal holding company tax, Hull should deduct $30,000 as dividends paid computed as follows: Dividends paid during 1990 Consent dividends $20,000 10,000 $30,000 Rule: The dividends paid deduction taken to arrive at personal holding company income includes the consent dividends for the taxable year as well as actual dividend distributions made. A consent dividend is a hypothetical distribution made by agreement with the shareholders of the company whereby the shareholders pick up that amount in their personal income without an actual distribution being made. Choices "a", "b", and "c" are incorrect, per the above rule. CPA-02236 Type1 M/C 115. CPA-02236 A-D May 91 II #55 Corr Ans...
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