Marabel Corporation Has Three Shareholders Who Together Own More Than

question 1485

Essay

Marabel Corporation has three shareholders who together own more than 50% of the stock throughout the year. More than 60% of Marabel's adjusted gross income is from dividends and interest income. Marabel has $300,000 of taxable income this year after taking a $40,000 dividends- received deduction. Marabel paid $50,000 of dividen to shareholders earlier in the year.
a. What is Marabel's personal holding company tax?
b. Assume the tax year is not quite over, and you are doing year- end projections for the board. How much in additional dividends should Marabel pay to shareholders in order to avoid the personal holding company tax?

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Definitions:

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A sodium salt of glutamic acid, used as a flavor enhancer in foods, with its safety being subject to debate.

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