Question

Determine whether the following statements about the accumulated eangstax are true or false a. Before the IRS can impose the accumulated earnings tax, it need only show that tax avoidance was one of b. Long-term capital gains are included in the accumulated earnings tax base Select the appropriate answer below the motives for the corporation's unreasonable accumulation of earnings Select true/false Each corporate member of a controlled group can claim a separate $150,000 or $250,000 accumulated earnings credit. A dividends-paid deduction can be claimed for both cash and property distributions (other than nontaxableC- stock dividends) made by a corporation. This deduction reduces both regular taxable income and accumulated taxable income c. d. e. The accumulated earnings tax liability cannot be eliminated by paying a deficiency dividend f. f Interest and penalties on the accumulated earnings tax deficiency accrue only from the date the IRS or the courts determine that the tax is owed The accumulated earnings tax is self-reported on Form 1120-AET that is filed along with the corporate tax return g. Choose from any drop-down list and then continue to the next question

Answer 1

A. True - It is necessary for IRS to prove that the earnings has been accumulated by corporations for evading tax after analysing and audting the tax return of corporation properly.

B. false - net capital gain after deducting related federal income taxes is a considered as a negative adjustment done to get accumulated taxable income

C. false - A single AEC statutory exemption must be allocated among the members of a controlled group.

D. False - there is no reduction in taxabl income due to dividiend paid deduction

E. True - There is not relation between payment of dificiency dividend and AET liability

F. false - interst and penalties on the AET come into effect from the date or day the return is due.

G false - AET is not self-assessed by filing a tax return.