Dozen Corporation Is Owned Equally by Twelve Unrelated Individuals

question 141

Multiple Choice

Dozen Corporation is owned equally by twelve unrelated individuals. Its taxable income this year is $100,000 and its regular federal income tax liability is $21,000. The company claims a $20,000 dividends- received deduction and pays $25,000 dividends to its shareholders. The corporation had accumulated earnings and profits of $900,000 at the end of the preceding year. The company has no reasonable needs of the business. The accumulated earnings tax is

• A) $19,800.
• B) $10,800.
• C) $14,800.
• D) $19,000.

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