Choice c is incorrect personal holding companies are

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Unformatted text preview: distributions in excess of accumulated earnings. On personal holding companies. Regardless of the number of stockholders in a corporation. CPA-02068 Explanation Choice "d" is correct. The imposition of the accumulated earnings tax does not depend on the number of shareholders a corporation has. Choice "a" is incorrect. Partnerships are not liable for the accumulated earnings tax, but most corporations are potentially liable. Choice "b" is incorrect. Corporations that make distributions in excess of accumulated earnings are not liable for the accumulated earnings tax. There would be no accumulated earnings left to tax. Choice "c" is incorrect. Personal holding companies are not liable for the accumulated earnings tax. CPA-02070 Type1 M/C A-D 27. CPA-02070 ARE Nov 95 #19 Corr Ans: C PM#37 R 3-01 Page 39 The following information pertains to Dahl Corp.: Accumulated earnings and profits at January 1, 1994 Earnings and profits for the year ended December 31, 1994 Cash distributions to individual stockholders during 1994 $120,000 160,000 360,000 What is the total amount of distributions taxable as dividend income to Dahl's stockholders in 1994? a. b. c. d. $0 $160,000 $280,000 $360,000 CPA-02070 Explanation 12 © 2009 DeVry/Becker Educatio...
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