Gary's Garage Inc. never paid a dividend and invested its after-tax earnings in tire company stock. It
Question:
Gary's Garage Inc. never paid a dividend and invested its after-tax earnings in tire company stock. It has no plans to expand and its working capital is ample. Gary owns 100 percent of the stock.
a. May Gary's Garage be a PHC?
b. If Gary's is a PHC not liable for the PHC tax (since there is no UPHCI), may the accumulated earnings tax be imposed?
c. If Gary's accumulated earnings are \(\$ 250,000\) and current after-tax earnings are distributed, may the accumulated earnings tax be imposed?
d. Same as (c), except accumulated earnings are \(\$ 200,000\), but the marketable stocks purchased with them are worth \(\$ 700,000\).
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a May Garys Garage be a Personal Holding Company PHC To be considered a PHC a corporation must meet certain criteria including At least 60 of its adju...View the full answer
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Related Book For 
CCH Federal Taxation 2019 Comprehensive Topics
ISBN: 9780808049081
2019 Edition
Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback
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