Mullins Corporation is classified as a PHC for the current year, reporting $263,000 of taxable income on its feder income tax return:

\begin{array}{lr}\text { Operating profit } & \$ 150,000 \\\text { Long- term capital gain } & 20,000 \\\text { Short- term capital gain } & 20,000 \\\text { Dividends (from } 25 \% \text { - ow ned domestic } &\\\text { Corporation) } & 200,000 \\\text { Interest } & 150,000 \\\text { Gross income } & \$ 540,000 \\\text { Minus: general and administrative expenses } & (40,000) \\\text { Minus: salaries } & (30,000)\\\text { "Adjusted" taxable income } & \$ 470,000 \\\text { Minus: charitable contributions } & (47,000) \\\text { Taxable income before special deductions } & \$ 423,000 \\\text { Minus: dividends- received deduction } & (130,000) \\\text { Taxable income } & \$ 293,000\end{array}

Actual charitable contributions made by Mullins Corporation were $75,000. What are the federal income tax due personal holding company (PHC) tax liability? Discuss the methods (if any) by which payment of the PHC tax ca avoided.

Which of Following Generally Does Not Indicate an Unreasonable Earnings

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