Which of the Following Actions Cannot Be Used to Eliminate

question 57

Multiple Choice

Which of the following actions cannot be used to eliminate a potential accumulated earnings tax liability situation involving a corporation owned by a mother and a father?

• A)Create plans to invest retained earnings in a plant expansion.
• B)Make a cash distribution within 2 1/2 months after the end of the tax year.
• C)Make a deficiency distribution within 90 days of the date on which the IRS determines that an accumulated earnings tax liability is owed.
• D)Liquidate the corporation.

---

Definitions:

Primary Phloem

The part of the plant's vascular system that conducts sugars and other metabolic products downward from the leaves.

Cork Cambium

Cork cambium is a layer of meristematic tissue in plants that produces cork cells to protect and waterproof the plant.

Periderm

The outer protective layer of a plant's bark, produced as part of secondary growth, replacing the epidermis in mature plant stems and roots.

Xylem

The vascular tissue in plants responsible for the conduction of water and nutrients from the roots to the leaves.