The Miller family has owned several large apartment buildings for many years They organized Miller Properties, Inc , to own and manage the properties The corporation is an accrual basis taxpayer and uses a calendar year All shares of Miller Properties are owned by Frank, Susan, and their mother, Id...

Under Sec 542 for an entity to be treated as a personal holding company two requirements must be met ...

The Miller family has owned several large apartment buildings for many years. They organized Miller Properties, Inc.,

Question:

The Miller family has owned several large apartment buildings for many years. They organized Miller Properties, Inc., to own and manage the properties. The is an accrual basis taxpayer and uses a calendar year. All shares of Miller Properties are owned by Frank, Susan, and their mother, Ida. Frank and Susan are president and chief financial officer of the respectively.
Miller Properties expects to have the following items of income and expense during the current year:
Rental revenue ... $1,200,000
Maintenance expenses ... 150,000
Depreciation ...... 250,000
Real estate taxes .... 400,000
Officers’ salaries .... 200,000

Read and analyze Sections 541 through 547 and determine if Miller Properties has a problem with the personal holding company (PHC) tax. If it does, estimate the amount of PHC tax and suggest alternatives for reducing or eliminating the PHC problem.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...