Unformatted text preview: ss income for the year is investment-type
Choice "a" is incorrect. A PHC is subject to the regular tax on corporate income as well as a 15% tax on
its undistributed PHC income.
Choice "b" is incorrect. As a personal holding company, Acme is not subject to the accumulated earnings
Choice "c" is incorrect. A regulated investment company must be registered under the Investment
Company Act of 1940 or file an election to be a regulated investment company. CPA-02158 Type1 M/C A-D Corr Ans: B PM#79 R 3-01 61. CPA-02158 PII May 93 #53 Page 3
In 19X2, Stone, a cash basis taxpayer, incorporated her CPA practice. No liabilities were transferred.
The following assets were transferred to the corporation:
Cash (checking account)
Fair market value
Cost $ 500
40,000 Immediately after the transfer, Stone owned 100% of the corporation's stock. The corporation's total
basis for the transferred assets is:
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- Fall '10
- The Land, Taxation in the United States, Educational Development Corp, Type1 M/C, Corr Ans