Business Finance
personal holding company tax planning

Question Description

Discussion Topic

The personal holding company (PHC) tax penalizes taxpayers who enter into tax-motivated transactions designed to shelter passive income of closely held corporations from higher individual tax rates..........Propose a plan in which you mitigate the potential for the PHC tax on the client’s corporation. (See Attach file)

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The personal holding company (PHC) tax penalizes taxpayers who enter into tax-motivated transactions designed to shelter passive income of closely held corporations from higher individual tax rates. Suppose you represent a professional athlete who is the majority owner of a corporation. The corporation has several personal service contracts with advertising agencies and endorsements for your client in addition to passive income. Propose a plan in which you mitigate the potential for the PHC tax on the client’s corporation. ...
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Final Answer

Attached.

Running head: PERSONAL HOLDING COMPANY TAX PLANNING

PERSONAL HOLDING COMPANY TAX PLANNING
Name:
Institution affiliation:
Date:

1

PERSONAL HOLDING COMPANY TAX PLANNING

2

PERSONAL HOLDING COMPANY TAX PLANNING
My client, the athlete, will need a Plan to eliminate the potential of the imposition of
personal holding company (PHC) tax on the undistributed income that provides a means for
shielding passive income from taxes. A suitable plan can involve two possible techniques that the
athlete can utilize.
The first strategy ...

JesseCraig (16545)
UIUC

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