During a Recent IRS Audit,the Revenue Agent Decided That Roger

question 70

Multiple Choice

During a recent IRS audit,the revenue agent decided that Roger used his closely-held corporation,Dodger Inc.,to avoid shareholder tax by accumulating earnings beyond the reasonable needs of the business.Dodger's taxable income for the year was $500,000 and it paid no dividends.Compute Dodger's accumulated earnings tax,assuming that it had accumulated $130,000 after-tax income in prior years.

• A)$0
• B)$100,000
• C)$76,000
• D)$50,000

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Definitions:

Simple Squamous

A single layer of flat cells, found in locations where processes such as filtration and diffusion take place.

Fenestrae

Small openings or pores, especially in the capillary endothelial cells, that allow for exchange of substances between the blood and surrounding tissues.

Interstitial Spaces

Areas that surround tissue cells, filled with interstitial fluid, which allows for the transport of substances between blood and cells.

Arteriosclerosis

A general term describing the thickening and hardening of the walls of the arteries, which can restrict blood flow to organs and tissues.