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.

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Definitions:

Ability to Perform

The capacity or competence of an individual or organization to execute tasks or achieve objectives effectively.

Picoeconomics

A branch of economic theory that explores the decision-making processes within an individual, particularly conflicts among different interests over time.

Future Benefits

Anticipated advantageous outcomes derived from current actions or investments.

Job Satisfaction

The level of contentment employees feel about their work, which can affect performance, productivity, and turnover.