1. Rohan, Inc., a calendar year closely held corporation, is not a PHC. If the company reports the following items, the accumulated taxable income is:

Taxable income	$200,000
Long-term capital gain (net of tax)	18,300
Federal income tax on LTCG	11,700
Dividends received deduction	18,000
Accumulated earnings credit	90,000
Federal income taxes	65,150

2. What amount of accumulated earnings of a service type corporation is considered within the reasonable needs of a business without the corporation having to show a bona fide business reason for the accumulation?

a.$250,000 or less.

b.$300,000 or less.

c.$150,000 or less.

d.$200,000 or less.

e.None of these choices are correct.