The accumulated earnings tax, which is imposed on corporations for the accumulation of earnings in excess of reasonable business needs, does not apply to: a. Closely-held corporations. b. Widely-held corporations. c. Corporations su

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 14MCQ

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Question

The accumulated earnings tax, which is imposed on corporations for the accumulation of earnings in excess of reasonable business needs, does not apply to: a. Closely-held corporations. b. Widely-held corporations. c. Corporations subject to the personal holding company tax. d. Both "Widely-held corporations" and "Corporations subject to the personal holding company tax". e. All of these choices are correct.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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