4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The company's taxable income and regular federal income tax liability are expected to be $100,000 and $21,000, respectively. The company has claimed a $20,000 dividends-received deduction in HA calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its shareholders. How much in additional dividends must be paid to shareholders in order to avoid the personal holding company tax? A) $95,000 B) $74,000 C) $99,000 D) $54,000
4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The company's taxable income and regular federal income tax liability are expected to be $100,000 and $21,000, respectively. The company has claimed a $20,000 dividends-received deduction in HA calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its shareholders. How much in additional dividends must be paid to shareholders in order to avoid the personal holding company tax? A) $95,000 B) $74,000 C) $99,000 D) $54,000
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 8P
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![4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The
company's taxable income and regular federal income tax liability are expected to be $100,000 and
$21,000, respectively. The company has claimed a $20,000 dividends-received deduction in
calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its
shareholders. How much in additional dividends must be paid to shareholders in order to avoid
the personal holding company tax?
A) $95,000
B) $74,000
C) $99,000
D) $54,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F755660c6-b240-48b1-bb87-69fe1fab31dd%2Fba9e393e-9c76-483d-ad0f-e4f8b7cd45b0%2Fvsoliat_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The
company's taxable income and regular federal income tax liability are expected to be $100,000 and
$21,000, respectively. The company has claimed a $20,000 dividends-received deduction in
calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its
shareholders. How much in additional dividends must be paid to shareholders in order to avoid
the personal holding company tax?
A) $95,000
B) $74,000
C) $99,000
D) $54,000
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