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Unformatted text preview: /$40,000 (total distributions)
x $10,000 (Current E&P) = Amount out of Current E&P $5,000 Accumulated E&P = all used in March distribution = $0 Dividend amount $5,000 Choices "a", "b", and "c" are incorrect per the above explanation.
NOTE: We believe that this is the first and only time the AICPA has asked this particular nuance. Given it
is a disclosed question, it may or may not appear again. We do not discuss this in our text and
understanding this question should be adequate for preparation. CPA-04755 Type1 M/C A-D Corr Ans: D PM#86 R 3-01 67. CPA-04755 Released 2005 Page 35
Tan Corp. calculated the following taxes for the current year:
Regular tax liability
Tentative minimum tax
Personal holding company tax $210,000
65,000 What is Tan's total tax liability for the year?
Choice "d" is correct. Tan's tax liability is calculated as follows:
Tan's regular tax liability
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.
- Fall '10
- The Land