Personal Holding Company Tax

Personal Holding Company Tax

A 15% tax added to corporate taxes in the United States on corporations in which five or fewer persons control at least half of the company's stock and at least 60% of the company's income is passive income from companies it owns. This tax is levied to discourage the existence of personal holding companies.
References in periodicals archive ?
The tax preparer incorrectly concluded that the personal holding company tax did not apply.
Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include: the outcome of settlement discussions with the Internal Revenue Service regarding the final amount of the potential tax liabilities and associated payments related to the previously disclosed personal holding company tax matters; uncertainty regarding the effect or outcome of the company's announced sale to an affiliate of Blackstone Capital Partners V L.
the flat tax, the accumulated earnings tax and the personal holding company tax.
And several C-corporation downsides, such as excess compensation, personal holding company tax and unreasonable accumulation of earnings are generally not problems for S-corporations.
Chapter 7 covers the determination of consolidated tax liability, delving into areas such as the alternative minimum tax, the personal holding company tax, and the accumulated earnings tax.
becoming subject to personal holding company tax for federal income tax purposes for 2005.
It should also be noted that if a dividend is paid from a TR, S to avoid personal holding company tax, when received by the REIT the dividend will not represent qualifying income for purposes of the 75% gross income test set forth under Sec.
Other corporate problems may also emerge, such as the accumulated excess earnings or personal holding company tax.
The Act specifically provides that a pension trust will not be treated as a single individual for purposes of the `five-or- fewer-rule' and stipulates that a REIT is not subject to the personal holding company tax on its undistributed income.
TLC Beatrice said that the sale of its French food distribution business left it with a substantial cash position and that the payment of a special dividend will enable the company to eliminate its potential personal holding company tax liability while allowing its shareholders to participate in the company's increased profits.
A similar issue could arise with the personal holding company tax.
1 Report of Foreign Bank Account and Schedule PH Personal Holding Company Tax.

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