Which of the following is descriptive of the accumulated earnings tax?
A)The tax rate is the same as the tax rate for a personal service corporation (PSC).
B)For a closely held corporation that generates substantial earnings and never pays dividends,the tax still can be avoided.
C)The tax applies to both C corporations and S corporations.
D)Only a.and b.are correct.
E)a. ,b. ,and c.are correct.

Question

Quizplus · Accepted Answer

The accumulated earnings tax can be avoided by a closely held corporation if it can demonstrate that the earnings are being retained for reasonable business needs, even if it doesn't pay dividends.

Which of the Following Is Descriptive of the Accumulated Earnings