Comprehensive Problem - Marital Aids Inc. reported the following results last year:
Gross income from sales $50,000
Salaries 20,000
Overhead 25,000
Capital gains 200,000
Net operating loss from previous year 30,000
Dividends from U.S. sources 40,000
Tax-exempt interest 10,000
Taxable interest 35,000
Income tax paid (including $59,650 on capital gains) 62,050
If the corporation has only four individual shareholders, compute the following:
a. Adjusted ordinary gross income.
b. Personal holding company income.
c. Undistributed personal holding company income.
d. Current dividend required to avoid personal holding company tax.
e. What impact would it have if taxable interest was only $12,000 and there was no NOL carryover?