1. Which of the following actions cannot be used to eliminate a possible personal holding company tax liability involving a corporation owned by a mother and a father?

A) Sell additional stock to other family members.

B) Make a cash distribution within 2 1/2 months of the end of the tax year.

C) Make a deficiency distribution within 90 days of the date on which the IRS determines that a personal holding company liability is owed.

D) Liquidate the corporation.

2. Identify which of the following statements is false.

A) A corporation files a Schedule AE to report the amount of its accumulated earnings tax liability for the tax year.

B) A corporation that is subject to the accumulated earnings tax may also be subject to interest and underpayment penalties on the amount of the unpaid liability.

C) A corporation files a Schedule PH to report its PHC tax for the tax year.

D) The corporate AMT liability is reported on Form 4626.

3. The accumulated earnings tax is imposed at what rate?

A) 10%

B) 20%

C) 15%

D) 35%