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 HA 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 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 HA 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 C) $99,000 D) $54,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
C) $99,000
D) $54,000
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