Homework Sourse1 Rohan Inc a calendar year closely held corporation is not
1. Rohan, Inc., a calendar year closely held corporation, is not a PHC. If the company reports the following items, the accumulated taxable income is:
2. What amount of accumulated earnings of a service type corporation is considered within the reasonable needs of a business without the corporation having to show a bona fide business reason for the accumulation?
a.$250,000 or less.
b.$300,000 or less.
c.$150,000 or less.
d.$200,000 or less.
e.None of these choices are correct.
| Taxable income | $200,000 |
| Long-term capital gain (net of tax) | 18,300 |
| Federal income tax on LTCG | 11,700 |
| Dividends received deduction | 18,000 |
| Accumulated earnings credit | 90,000 |
| Federal income taxes | 65,150 |
Solution
1)
$ 44550
2) $250,000 or less.
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