Which of the following does not constitute PHC income?

	1.	Dividend income
	2.	None of these
	3.	Interest income included in gross income
	4.	Tax-exempt interest

How many of the following statements are true:

1. X Co. doesnt satisfy the income test for PHCs. 2. The tax rate imposed on undistributed PHCI is the maximum tax rate imposed on qualified dividends. 3. A company may be subject to both the accumulated earnings tax and PHC tax in the same taxable year. 4. Deficiency dividends apply to reduce both the accumulated earnings tax and PHC tax.

	1.	1
	2.	2
	3.	3
	4.	4
	5.	None of these.

Which of the following will prevent a corporation from qualifying under Subchapter S?

	1.	a corporate shareholder
	2.	100 individual shareholders-90 singles, 5 married couples
	3.	common stock with different voting rights
	4.	More than one of these
	5.	None of these

Which statement is true with regard to the complete liquidation of a calendar year subsidiary under Code Section 332 which is 90% owned by its parent?

	1.	Gain or loss is not recognized by the parent corporation and the parent has a fair market value basis in the assets received.
	2.	No formal plan of liquidation need be adopted if the shareholders adopt a resolution authorizing the distribution on 1/14/X6 and the liquidating distributions occur on 6/10/X7 and 11/10/X8.
	3.	The minority shareholders recognize gain or loss.
	4.	The subsidiary doesnt recognize gain or loss on its distributions to the minority shareholders.
	5.	More than one of these statements is true.

Which statement is false?

	1.	Section 306 will not apply on a complete termination of the shareholders stock interest by redemption.
	2.	More than one of these are false.
	3.	There are no tax consequences upon issue of Section 306 stock, but upon a sale to a third party the shareholder may recognize income based on earnings and profits on the date of the sale.
	4.	None of these.
	5.	Common stock can be Section 306 stock.