Viszla, Inc. (a calendar year corporation) is wholly owned by Duke Sandor. Viszla, Inc. is a personal holding company. Viszla had the following income and expenses during the year:
Interest income from Wells Fargo Bank........ $ l50,000
Capital gains................................................... $ 50,000
Rental income on a fully depreciated building $ 320,000
Gross margin on the sales of dog collars..... $ 45,000
Property taxes on the building............... ($ 30,000)
Insurance and management fees on the building ($ 15,000)
Tax preparation & accounting fees............ ($ 20,000)
Taxable income for the year............. $ 500,000
Duke is personally in the maximum tax bracket and wishes to arrange Affairs so as to minimize his current taxes.
REQUIRED:
A. How much is Ordinary Gross Income (OGI) for the year?
B. How much is Adjusted Ordinary Gross Income (AOGI) for the year?
C. It is now December 31st. What should you do to minimize taxes?