Personal Holding Company Tax Practice Test

Answer Corp. has two common stockholders. Answer derives all of its income from investments in stocks and securities, and it regularly distributes 51% of its taxable income as dividends to its stockholders. Answer is a:

Sleigh Corp. is a calendar year domestic personal holding company. Which deduction(s) must Sleigh make from Year 17 taxable income to determine undistributed personal holding company income prior to the dividend-paid deduction?

I. Federal income taxes
II. Net long-term capital gain (less related federal income taxes)