4) Montrose Corporation is classified as a personal holding company. It is almost year-end. Thecompany's taxable income and regular federal income tax liability are expected to be $100,000 and$21,000, respectively. The company has claimed a $20,000 dividends-received deduction in Kcalculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to itsshareholders. How much in additional dividends must be paid to shareholders in order to avoidthe personal holding company tax?A) $95,000B) $74,000C) $99,000D) $54,000

Under Section 541 of the U.S Code, PHC tax is the tax imposed on the corporation's undistributed…

4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The company's taxable income and regular federal income tax liability are expected to be $100,000 and $21,000, respectively. The company has claimed a $20,000 dividends-received deduction in calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its shareholders. How much in additional dividends must be paid to shareholders in order to avoid the personal holding company tax? A) $95,000 B) $74,000 A C) $99,000 D) $54,000

4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The company's taxable income and regular federal income tax liability are expected to be $100,000 and $21,000, respectively. The company has claimed a $20,000 dividends-received deduction in calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its shareholders. How much in additional dividends must be paid to shareholders in order to avoid the personal holding company tax? A) $95,000 B) $74,000 A C) $99,000 D) $54,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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