Which of the Following Actions Cannot Be Used to Eliminate

question 57

Multiple Choice

Which of the following actions cannot be used to eliminate a potential accumulated earnings tax liability situation involving a corporation owned by a mother and a father?

• A)Create plans to invest retained earnings in a plant expansion.
• B)Make a cash distribution within 2 1/2 months after the end of the tax year.
• C)Make a deficiency distribution within 90 days of the date on which the IRS determines that an accumulated earnings tax liability is owed.
• D)Liquidate the corporation.

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Definitions:

Tolerance

The body's reduced response to a substance (like a drug) due to repeated use, which often leads to needing larger doses to achieve the original effect.

Withdrawal Symptoms

Physical or psychological symptoms that occur after stopping or reducing intake of a substance to which one has become addicted.

Common Types

Refers to the most frequently occurring or widespread categories or forms within a certain context.

Low Back

Refers to the lower region of the back, often associated with pain or discomfort due to various causes, including strain or injury.