LO.4 Orange and Rust have both been in business for approximately nine years. Each corporation has 14

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LO.4 Orange and Rust have both been in business for approximately nine years. Each corporation has 14 shareholders and taxable income of about $350,000 per year. Neither corporation has made any dividend distributions nor plans to do so in the near future. Explain why Orange may have an accumulated earnings tax problem, while Rust does not.

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Hemstone Ouma

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