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.

When Using the Bardahl Formula, an Increase in Accounts Payable

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge