Identify Which of the Following Statements Is True

question 8

Multiple Choice

Identify which of the following statements is true.

• A)The personal holding company tax is levied to prevent closely held corporations from sheltering passive income.
• B)Caleb Corporation is owned by a mother and her two daughters. It reports $100,000 of rental income; $30,000 of depreciation, interest, and property taxes on the rental real estate; and $10,000 of dividend income. Caleb Corporation is classified as a personal holding company.
• C)Luke Corporation is owned by a father and his son. The corporation employs 10 individuals to provide public accounting services. Father and son make all of the work assignments for the professional employees. The professional fees earned by the corporation are personal holding company income.
• D)All of the above are false.

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Definitions:

Need the Money

A phrase indicating financial necessity, often used to explain the reason for seeking employment or engaging in certain activities for compensation.

Retire

The act of leaving one's job and ceasing to work, typically due to age or health reasons.

Age 66

A specific age that can signify eligibility for senior citizen benefits in some contexts, including retirement and social security in various countries.

Advisory Grandparents

Older family members who offer guidance and advice, playing a supportive role in their grandchildren’s upbringing.