Which of the Following Actions Cannot Be Used to Eliminate

question 52

Multiple Choice

Which of the following actions cannot be used to eliminate a possible personal holding company tax liability involving a corporation owned by a mother and a father?

• A) Make a cash distribution within 2 1/2 months of the end of the tax year.
• B) Make a deficiency distribution within 90 days of the date on which the IRS determines that a personal holding company liability is owed.
• C) Sell additional stock to other family members.
• D) Liquidate the corporation.

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Definitions:

Tying Arrangement

A sales agreement in which the sale of one product is dependent on the buyer purchasing another product.

Competitive Harm

Refers to damage or disadvantage caused to a competitor or the competitive landscape by anti-competitive practices or behaviors.

Per Se Illegal

A term used in antitrust law referring to certain business practices that are considered illegal by their very nature, without the need for further examination of their effects.

Exclusive Dealing

An agreement where a seller agrees to sell, and a buyer agrees to buy, products or services exclusively from each other.