6. The personal holding company penalty tax rate is A) 20%. B) 10%. C) 15%. D) 35% 7. Identify which of the following statements is false. A) The 65% dividends-received deduction can be claimed when computing a corporation's undistributed personal holding company income (UPHCI). B) Rental expenses in excess of rental income are added back to taxable income to arrive at personal holding company income (PHCI). Ramirez Corporation is a personal holding company. Its taxable income for this year is $75,000. The corporation's charitable contributions are $10,000 greater than its income tax charitable contribution deduction limitation. Ramirez's UPHCI is $65,000, assuming no other adjustments must be made. D) The PHC tax is assessed at 20%. 8. A personal holding company cannot take a dividends-paid deduction for A) throwback dividends. B) consent dividends. C) deficiency dividends. D) preferential dividends. 9. Which of following generally does not indicate an unreasonable earnings accumulation? A) planned expansion of business facilities B) expenditure of corporate funds for the personal benefit of the shareholders C) investments in properties or securities unrelated to the activities of the corporation D) loans to shareholders 10. When computing the accumulated earnings tax, which of the following is not a reduction to arrive at accumulated taxable income? A) accumulated earnings credit B) dividends-paid deduction C) NOL deduction claimed D) accrued federal income taxes 11. Which of the following entities is subject to the accumulated earnings tax? A) Sec. 501 tax-exempt corporation B) personal holding company C) C corporation D) S corporation