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Re:c-corp shut down but has investment assets (1 viewing) (1) Guest
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TOPIC: Re:c-corp shut down but has investment assets
#7188
Kash (User)
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c-corp shut down but has investment assets 7 Years, 2 Months ago Karma: 1  
If a c-corp sold its business assets but retained investment assets, i.e. stocks and bonds, does the c-corp have to distribute out the investment assets as dividends or can the c-corp just convert to an s-corp to aviod the tax?
 
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tbm1231 (User)
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Re:c-corp shut down but has investment assets 7 Years, 2 Months ago Karma: 0  
The good news is that the accumulated earnings tax does not apply - but the bad news is that the personal holding company (PHC) tax probably does! A PHC is any closely held corporation if at least 60% of its ordinary adjusted gross income for the year is investment-type income (like dividends from a publicly traded corporation). There is a 15% personal holding company penalty/tax on undistributed personal holding company income (for taxable years 2003-2011). The determination is made annually. There are numerous adjustments and deductions allowed in determining the amount of the tax. Federal Form 1120, Schedule PH walks through the calculation, and IRC Section 541 and following give the PHC rules. I hope this helps.
 
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