Which of the Following Actions Cannot Be Used to Eliminate

question 48

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

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Definitions:

Specific Purpose

The particular goal or intention behind a speech, presentation, or written document.

Business Message

Information or a communication conveyed by a company to its employees, customers, or stakeholders.

Realistic Goals

Objectives that are practical and achievable, taking into account current resources and constraints.

Good Business Sense

The ability to make sound judgments and decisions in the context of managing and growing a business.