Austin Is the Sole Shareholder of Purple,Inc

question 3

Multiple Choice

Austin is the sole shareholder of Purple,Inc.Purple's accumulated E & P at the beginning of the year is $700,000.Purple's taxable income after paying a salary and bonus to Austin of $100,000 is $500,000.Assume the salary and bonus payment are reasonable.Purple's maximum exposure in calculating accumulated taxable income for purposes of the accumulated earnings tax for the current tax year is:

• A)$330,000.
• B)$500,000.
• C)$600,000.
• D)$1,300,000.
• E)None of the above.

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Definitions:

Praises

Expressions of approval, commendation, or admiration directed towards a person, group, or entity.

Informal Style

A casual and relaxed way of communication or presentation not bound by strict formal rules or conventions.

Linear Manner

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International Audience

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