A Corporation Is Owned Equally by 10 Unrelated Individuals

question 82

Essay

A corporation is owned equally by 10 unrelated individuals. Its taxable income this year is $100,000 and its regular federal income tax liability is $22,250. The company claims a $15,000 dividends-received deduction and pays $25,000 dividends to its shareholders. The corporation had accumulated earnings and profits of $220,000 at the end of the preceding year. The company's reasonable needs of the business at the end of the year of $240,000. What is the amount of the accumulated earnings tax?

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Definitions:

Grammatics

The study of grammar, which is the system and structure of a language including syntax, morphology, and phonology.

Linguistic Relativity Hypothesis

The theory suggesting that the structure of a language affects its speakers' world view or cognition, and thus people's perceptions are relative to their spoken language.

Surface Structure

In linguistics, the outward form of a sentence, including words and their syntax, as opposed to the deeper meanings and relationships analyzed in deep structure.

Deep Structure

In linguistics, the underlying meaning of a sentence, as distinct from its surface structure or the way it is expressed.