Can you please explain this memo?

Proskauer Corporation operates a family business established by Ralph Ferrera and his brotherDr. Rose Mamadou Ferrera ten years ago. Dr. Marian and Ralph Ferrera died this year and theProskauer Corporation stock passed to their two children and one grandchild as separate property.Proskauer Corporation primarily invests its assets in rental property, highly appreciated stocks,and corporate bonds. The tax advisor who oversees Proskauer Corporation's tax matters made the following pro?t projection for the year: Rentals $460,000Dividend income (from a 40% owned domestic subsidiary) 290,000Interest income 20,000Gross income $770,000Rental expenses:Depreciation expense 70,000Interest expense 100,000Property taxes 10,000Other section 162 expenses 20,000General and administrative expenses 15,000Total expenses 21 000Net profit $555,000 Proskauer Corporation has paid dividends of $10,000 in each of the past three years. The stockinvestments have substantially appreciated in value in the past six months. As a result, dividendincome is expected to increase from last year's $290,000 to $380,000 this year. Proskauer Corporation for reasons not germane to this discussion has not been a personal holding companyin prior years. Required:(1) Prepare a memorandum to Ms. Festival, your tax manager, regarding all appropriate issueswith respect to the personal holding tax. Include in your memorandum, the following twoquestions. (Do not limit your memorandum to these two questions. Please include any othermatters and suggestions you believe to be relevant.) 1. Is Proskauer Corporation likely to be deemed to be a personal holding company? 2. If Proskauer Corporation is likely to be deemed a personal holding company for thecurrent year, what actions, if any, should be taken before year—end to eliminate thepersonal holding company liability? After year—end?