Question

Kee Holding Corp. has eighty unrelated equal stock-holders. For the year ended December 31, 2019, Kee's income comprised the following: Net rental income $ 1,000 Commissions earned on sales of franchises 3,000 Dividends from taxable domestic corporations 90,000 Deductible expenses for 2019 totaled $10,000. Kee paid no dividends for the past three years. Kee's liability for personal holding company tax for 2019 will be based on undistributed personal holding company income of___________.

Answer 1

$84,000

Step-by-step explanation:

Based on the Data provided, the Total Income for Kee Holding Corporation is $94,000 whereas the Total Expenses are $10,000. This expense for $10,000 will be deducted for calculating tax on undistributed personal holding company income because it is a Deductible Expense and Deductible Expenses are allowed to be deducted when calculating Tax liability.

Rental Income $ 1,000.00

Commissions $ 3,000.00

Dividends $ 90,000.00

Total Income $ 94,000.00

Deductible Expenses $ 10,000.00

Net Income $ 84,000.00