Gamma Corporation has generated substantial cash flows from its manufacturing activities. It has only a moderate need to reinvest its earnings in existing facilities or for expansion. In recent years, the corporation has amassed a large investment portfolio due to management's unwillingness to pay dividends. The corporation is unlikely to be deemed a PHC but is concerned about its exposure to the accumulated earnings tax. Explain to Gamma's president what steps he can take to avoid liability for the accumulated earnings tax in the current year? In future tax years? Do these steps require the payment of a cash dividend? Select the true statement(s). (More than one answer may be selected.) A. The accumulated earnings tax can be avoided in the current year if the S corporation election is made in the first 2 1/2 months of the tax year. B. Gamma Corporation may avoid liability for the accumulated earnings tax in future years by making an S corporation election. OC. Gamma Corporation may avoid liability for the accumulated earnings tax in future years by making a C corporation election. ID. Gamma could liquidate the corporation and continue as an LLC with the limited liability attribute of a corporation but without the liability for the accumulated earnings tax. E. The accumulated earnings tax can be avoided in the current year if the corporation election is made in the first half of the tax year. NE Gamma must either distribute its accumulated earnings to its shareholders through dividends, or justify the accumulation as meeting the reasonable needs of the business. G. The accumulated earnings tax is unavoidable unless significant cash dividends are distributed In sum, Select th A. a number of ways are available to avoid the PHC tax other than a cash dividend payment. B. the only way to avoid the PHC tax is to distribute earnings through dividends. in the first 2 1/2 months of the tax S corporation election corporation election irporation but without the liability f in the first half of the tax year. the accumulation as meeting the D. the only way to avoid the PHC tax is to liquidate the company. there is no way of avoiding the accumulated earnings tax in future years. ] E. DE. D G there is no way of avoiding the accumulated earnings tax in the current year. In sum