This preview shows page 1. Sign up to view the full content.
Unformatted text preview: ut not paid by Hull to its stockholders $100,000
10,000 In computing its 1990 personal holding company tax, what amount should Hull deduct for dividends paid?
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
$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...
View Full Document
- Fall '10
- The Land