Personal Holding Company


Also found in: Acronyms.

Personal Holding Company

A corporation in which five or fewer persons control at least half of the company's stock and in which at least 60% of the company's income is passive income from companies it owns. Because personal holding companies may be used by the persons who control them to avoid personal taxes, the U.S. tax system imposes a 15% tax on personal holding company profits in addition to corporate taxes.
References in periodicals archive ?
subsidiary as a surrogate for a second-level tax, and the personal holding company tax, even if potentially applicable, typically should allow for generous accumulations without the risk of penalty.
Like the accumulated earnings tax, the tax on "Undistributed Personal Holding Company Income" is designed to encourage dividend distributions by C Corporations.
The TCJA has also breathed new life into the tax-avoidance rules under Internal Revenue Code Section 531 (the accumulated earnings tax, or AET) and Section 541 (the undistributed personal holding company tax, or PHCT), which had limited applicability in recent years due to high U.S.
954 lookthrough treatment of payments between related controlled foreign corporations under foreign personal holding company rules;
1297(b)(1) as "any income which is of a kind which would be foreign personal holding company income [FPHCI] as defined in section 954(c)."
(6) FBC income is made up of several categories of income, which are primarily: FBC sales income, FBC services income, and foreign personal holding company income.
A personal holding company exists when more than 50 percent of a corporation's outstanding stock is owned by 5 or fewer individuals, directly or indirectly, and 60 percent of the corporation's adjusted ordinary gross income is personal holding company income.
A personal holding company is a corporation that meets two particular tests (and is not specifically excluded from such status).
An appraisal is required if the security is not tradable on an established securities exchange (such as the donor's personal holding company).
If the foreign target is a Controlled Foreign Corporation, or CFC (more than 50 percent owned by U.S persons, each of whom owns at least 10 percent directly or indirectly), or a Foreign Personal Holding Company (FPHCO), some or all of the deemed asset sale gain could be Subpart F or FPHCO income.
This means that Berlusconi's personal holding company Fin-invest, which still owns a stake of about 50% in Mediaset, will cash in about $100 million in dividends.
Since the Tax Reform Act of 1986 (TRA 86) repealed the General Utilities doctrine, it has become more attractive to retain a liquidated corporation as a personal holding company (PHC).

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