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socrateaser
socrateaser, Lawyer
Category: Tax
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Experience:  Retired (mostly)
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My Business is a real estate company but the majority of our

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My Business is a real estate company but the majority of our income recently is from investments and the dividends from equities it holds. My question is will general expenses such as computer hardware, travel etc. offset this type of income? Secondly what is the formula for having the status as a holding company and what is the additional amount that would have to be paid. We generate approximately 100k in dividend income.
Submitted: 5 years ago.
Category: Tax
Expert:  socrateaser replied 5 years ago.
My question is will general expenses such as computer hardware, travel etc. offset this type of income?

A: No. The calculation of personal holding company income is based on gross income (including gross dividend income).

Secondly what is the formula for having the status as a holding company and what is the additional amount that would have to be paid. We generate approximately 100k in dividend income.

A: If 60% or of the corporation's total income is personal holding company income, then the additional 15% tax applies to the personal holding company income.

See IRC 542; Treas. Reg. 1.542-1; 1.542-2.

Hope this helps.

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