KA 4) Montrose Corporation is classified as a personal holding company. It is almost year-end. Thecompany's taxable income and regular federal income tax liability are expected to be $100,000 and$21,000, respectively. The company has claimed a $20,000 dividends-received deduction incalculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to itsshareholders. How much in additional dividends must be paid to shareholders in order to avoidthe personal holding company tax?A) $95,000B) $74,000C) $99,000D) $54,000

Personal holding company is known as a C corporation formed for the purpose of owning the stock of…

4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The company's taxable income and regular federal income tax liability are expected to be $100,000 and $21,000, respectively. The company has claimed a $20,000 dividends-received deduction in HA calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its shareholders. How much in additional dividends must be paid to shareholders in order to avoid the personal holding company tax? A) $95,000 B) $74,000 C) $99,000 D) $54,000

4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The company's taxable income and regular federal income tax liability are expected to be $100,000 and $21,000, respectively. The company has claimed a $20,000 dividends-received deduction in HA calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its shareholders. How much in additional dividends must be paid to shareholders in order to avoid the personal holding company tax? A) $95,000 B) $74,000 C) $99,000 D) $54,000

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 8P

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