Compute the undistributed personal holding company income

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Assignment: Federal Taxation-Comprehensive Topics

Comprehensive Problem. Marital Aids Inc. reported the following results last year:

Gross income from sales

$50,000

Salaries

20,000

Overhead

25,000

Capital gains

200,000

Net operating loss from previous year

30,000

Dividends from U.S. sources

40,000

Tax-exempt interest

10,000

Taxable interest

35,000

Income tax paid (including $59,650 on capital gains)

62,050

If the corporation has only four individual shareholders, compute the following:

1. Adjusted ordinary gross income.
2. Personal holding company income.
3. Undistributed personal holding company income.
4. Current dividend required to avoid personal holding company tax.
5. What impact would it have if taxable interest was only $12,000 and there was no NOL carryover?

Reference no: EM131808717

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