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:

Whooping Crane

A large North American bird species, noted for its white plumage and loud, whooping calls, currently endangered.

Emigration

The act of leaving one's own country to settle permanently in another, moving abroad.

Cyclic

Referring to occurrences or processes that exhibit a series of repeated events or stages which happen in a predictable sequence.

Irruptive

A population growth pattern characterized by sudden increases due to favorable conditions, followed by steep declines as those conditions change.