Which of the Following Actions Cannot Be Used to Eliminate

question 23

Multiple Choice

Which of the following actions cannot be used to eliminate a possible personal holding company tax liability involving a corporation owned by a mother and a father?

• A)Sell additional stock to other family members.
• B)Make a cash distribution within 2 1/2 months of the end of the tax year.
• C)Make a deficiency distribution within 90 days of the date on which the IRS determines that a personal holding company liability is owed.
• D)Liquidate the corporation.

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Definitions:

Production Possibilities Frontier

A chart illustrating the maximum production potential for two or more items, considering a specific amount of inputs.

Positive Statement

An objective and fact-based statement or claim that describes how the world actually is, as opposed to what it should be, often used in economic analysis.

Normative Statement

A value judgment that expresses an opinion or belief about what ought to be, rather than statements of fact.

Administrative Department

A part of an organization responsible for managing its internal affairs and ensuring the efficient execution of operations.