Which of the Following Is Not a Permissible Reason for a Regular

question 26

Multiple Choice

Which of the following is not a permissible reason for a regular corporation to accumulate earnings at the entity level and avoid the imposition of the accumulated earnings tax?

• A) To construct a new plant facility in connection with expanding the corporation's business into a new geographic region
• B) To accumulate a fund of cash with which to pay off long-term debt due in twenty years
• C) To fund the development of a new product line
• D) To invest in the stock of an unrelated company to take advantage of the dividends received deduction

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Definitions:

Email

A method of exchanging digital messages over the Internet, using specific protocols between sender and receiver.

Email Communication

The exchange of messages between individuals or groups through electronic mail services.

Routine Activities

Regular, daily activities or tasks that are performed as part of one’s schedule or work.

Negative Critiques

Evaluations or feedback that focus on the shortcomings or failures of a work or performance.