Your client is facing a possible Personal Holding Company Tax (Section 541) or Accumulated Earnings Tax...

Your client is facing a possible Personal Holding Company Tax (Section 541) or Accumulated Earnings Tax (Section 531) in 2018. Compute the Personal Holding Company Tax (Section 541) due (and compute the Effective Tax Rate for this manufacturing company) based on the following facts: Taxable Income $522,000 Dividends Received Deduction 47,000 Accumulated Earnings Credit 36,100 Dividends Paid 38,000 Federal Income Taxes 109,620 Excess Charitable Contributions 23,400

Expert Solution


PHC Tax Computation
Taxable Income		522000
Dividends Received Deduction		47000
Accumulated Earnings credit		-36100
Dividends paid		-38000
Federal Income tax		-109620
Charitable contribution		-10428
Undistributed PHC Income		374852
PHC Tax rate @20%		74970.4



Charitable contribution
Taxable Income	522000
Less
Accumulated Earnings credit	-36100
Dividends paid	-38000
Federal Income tax	-109620

For purpose of 10% limitation, taxable income is	338280
10% limit	33828
Excess Charitable contribution	23400
Charitable contribution cLaimed during current year	10428

Taxable income computed without regard to
a)Charitable contribution
b)NOL carryback
c) Capital loss carry back
d) Dividend received deduction

ekkarill92 answered 2 years ago

One of your corporate clients has Section 541 personal holding company income in addition to ordinary...

One of your corporate clients has Section 541 personal holding company income in addition to ordinary income and has not distributed this income to its shareholders. You explain to the company's owner that, because the income is undistributed, the corporation will be subject to: A. deduction limitations B. the ordinary corporate income tax. C. carryover of excess income. D. a special tax penalty.

One of your corporate clients has 541 personal holding company income in addition to ordinary income...

One of your corporate clients has 541 personal holding company income in addition to ordinary income and has NOT distributed this income to its shareholders. You explain to the company's owner that, because the income is undistributed, the corporation will be subject to: A) deduction limitations B) the ordinary corporate income tax C) carryover of excess income D) a special tax penalty

24. Explain the purpose of the accumulated-earnings tax, when it is imposed, and the rate at...

24. Explain the purpose of the accumulated-earnings tax, when it is imposed, and the rate at which it is imposed. Include the Internal Revenue Code Section

what is closely held corporation, a personal holding company, and a personal service corporation? what are...

what is closely held corporation, a personal holding company, and a personal service corporation? what are S Corporations? advantages and disadvantages of S Corporations. example of a type of business suitable. May corporations be formed as S Corporations or no? Please explain and include information on S Corporation Election. thank you

You are a CPA being paid to prepare a tax return for a client. Your client...

You are a CPA being paid to prepare a tax return for a client. Your client has a maid that cleans their house twice a week, and is paid about $3,000 per year. You notice your client has not been reporting, withholding, or paying any taxes on the wages of this household employee. When you bring this issue up to your client, they are quick to reply that the maid is a part-time employee and not subject to the “nanny...

Assume that your tax client is the sole heir of an inheritance. Refer to Estate Tax...

Assume that your tax client is the sole heir of an inheritance. Refer to Estate Tax Form 706 and Publication 706 and explain to the client 1) the property included in Gross Estate and 2) the taxes which must be paid. In addition, discuss with the client at least two strategies you will use to minimize his or her estate transfer taxes.

What are some key challenges Nissan is facing this day and age? What are your personal...

What are some key challenges Nissan is facing this day and age? What are your personal recommendations for improving operations at this company?

TAX Main Assignment: Your client is planning to set up an investment company (private limited) in...

TAX Main Assignment: Your client is planning to set up an investment company (private limited) in Singapore in mid 2018. Their funds will be invested in shares of public listed companies and also on real properties. But they are in a dilemma on whether to set up an investment holding or investment dealing company. Some of your client’s friends have prompted that the tax treatment between the two are different. However your client’s intention is to minimise their tax obligations...

What are the possible health conditions if your client absent of corneal reflex?

You are the Manager of Financial Reporting for your company. Your company is facing a number...

You are the Manager of Financial Reporting for your company. Your company is facing a number of reporting challenges as a result of an acquisition, COVID-19 and other activities. Although the CFO makes the final decision on accounting standard applications, the CFO relies heavily on your expertise (acquired in the Aurora University MSA program) and your years of research and experience. In a meeting (brainstorming session), a list of potential reporting issues is developed and are listed below. You have...

Question