Which of the Following Statements Regarding the Personal Holding Company

question 82

Multiple Choice

Which of the following statements regarding the personal holding company tax is false?

• A) The personal holding company tax is imposed in addition to the regular corporate income tax.
• B) The personal holding company tax was originally enacted to discourage individuals from incorporating their investment portfolios.
• C) The personal holding company tax is calculated by a qualifying corporation and paid on its annual corporate income tax return.
• D) The personal holding company tax is assessed on a qualifying corporation's undistributed personal holding company income.

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Definitions:

Liability

A legal obligation or responsibility; it can refer to financial debt or other forms of legal responsibilities individuals or entities may have towards others.

Guarantee

A legal promise to ensure the fulfillment of an obligation or repayment of a loan in case the original party fails to do so.

Terminate

Refers to the action of bringing something or an agreement to an end before its natural conclusion.

Cancellation

The act of crossing out a writing. The operation of destroying a written instrument.