Dragon Corporation Reports a Distribution on Its Return from the Third

question 37

Multiple Choice

Dragon Corporation reports a distribution on its return from the third previous year as a stock redemption producing a capital gain. When the return is audited during the current year, the distribution of the third previous year is characterized by the IRS as a dividend. This change causes Dragon Corporation to be classified as a personal holding company for the third previous year. Which of the following statements is correct?

• A)Dragon Corporation will owe interest and/or underpayment penalty even if the PHC tax is avoided by a deficiency dividend.
• B)Dragon Corporation will owe no interest and/or underpayment penalty if the PHC tax is avoided by a deficiency dividend.
• C)A deficiency dividend is not permitted to be paid by Dragon.
• D)A dividend must be paid within 120 days of establishing the PHC tax liability and a claim for a dividends-paid deduction must be filed within 90 days of the determination date.

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Definitions:

Neurotransmitters

Chemical messengers that transmit signals across a chemical synapse, such as between neurons or from neurons to muscles.

Human Genome

The complete set of nucleic acid sequences for humans, encoded as DNA within the 23 chromosome pairs in cell nuclei and in a small DNA molecule found within individual mitochondria.

Gene Expression

The process by which the information encoded in a gene is used to direct the assembly of a protein molecule.

Epigenetic Marks

Biological modifications to DNA and histones that influence gene expression without altering the DNA sequence.