Please address the following: 1. Please research the IRS website and provide information on a closely held corporation, a personal holding company, and a personal service corporation. Please provide an example of a type of business that would be suitable for each of business organizations noted above (provide a different example for each type). 2. Citradoria Corporation is a regular corporation that contributes $35,000 cash to qualified charitable organizations during the current tax year. The corporation has net operating income of $140,000, before deducting the contributions, and dividends received from domestic corporations (ownership in all corporations is less than 20 percent) in the amount of $20,000. What is the amount of Citradoria Corporation\'s allowable deduction for charitable contributions for the current year? What may the corporation do with any excess amount of contributions? Solution Answer to 1 Closely held corporation A closely held corporation is a corporation that: - Has more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year; and - Isn\'t a personal service corporation A closely held corportation is subject to additional limitations in the tax treatment of items such as passive activity losses, at-risk rules, and compensation paid to corporate officers Personal holding company A corporation will be considered a personal holding company if it meets both the Income Test and Stock ownership test - Income test states that at least 60% of the corporation\'s adjusted ordinary gross income for the tax year is from certain dividends, interest, rent, royalties and annuities - Stock ownership test states that at any time during the last half year of the tax year, 5 or fewer individuals must directly or indirectly own more than 50% in value of the corporation\'s outstanding stock Personal service corporation - Its principal activity is performing personal services during the \'testing period\' - Its employee-owners substantially performs the services. A corporation meets this requirement if more than 20% of the corporation\'s compensation cost for performing personal services is for personal services its employee-owners perform during the testing period - Its employee-owners own more than 10% of the FMV of its outstanding stock Answer to 2 Calculation of allowable deduction for charitable contribution Corporate charitable contribution deduction is limited to 10% of taxable income Calculation of taxable income: Net operating income = $ 140000 Add: Dividend received = $ 20000 Total = $ 160000 Less: Deduction @ 70% w.r.t. dividend (as shareholding is less than 20%) = 70% X 20000 = 14000$ Net taxable income = $ 146000 Actual Charitable contribution deduction = $ 35000 Charitable contribution deduction limited to 10% of taxable income = 10% X146000 =$ 14600 Therefore, allowable deduction for charitable contribution is $ 14600 for curren.

1. Please answer the discussion questions and TYPE you answers. MINICASE ARE YOU
REALLY BUYING AMERICAN? Consider the follawing scenario of a typical" American fam
work, stopping for gas at the Shell station. At the grocery ily: The Osbornes, Jesse and Ann, live
in the suburbs of store, she fills her cart with a variety of items, including Chicago Jesse is a
manager at Trader Joe's specialty grocery Ragu spaghetti sauce, Hellmann's mayonnaise,
Carnation store chain. Ann is an edvertising executive for Leo Burnett Instant Breakfast drink, a
case of Arrowhead water, CoffeeMate nondairy coffee creamer, Chicken-of the-Sea Ann listens
to the new Adam Lambert CD on her Alpine car stereo in her Jeep Cherakes while driving homa
from canned tuna, Lipton tea, a hall-dozen cans of Slim-Fast. Dannon yogurt, and several
packages of Stouffer's Lean dinners and some Hot Packats. For a treat. Groupe Danone of
France produces Dannon yogurt she picks up some Ben & Jerry's ice cream, Toll House cook-
es, and a Butterfinger candy bar. She also grabs several cans af Alpo for thair dog, Sassy, and a
box of Friskies and a bag of Tidy Cat cat litter for their cat, Lily. She goes down the toilet- ries
aisle for some Dove soap, Q-tips cotton swabs, Vaseline Samsung smartphones are made by
South Korea's lip gloss, and Jergen's moisturizing lotion. Before fhng,Samsung- she calls Jesse
on her Samsung smartphone to see whetherBertelsmann AG of Germany owns 53 percent of
there is anything else he needs. Ho asks her to pick up some PowerBars for him to take to the
gym during his lunchtime the remaining 47 percent. workouts next week. She also stops at the
bookstore andSociete Bic of France produces Bic pens picks up the new John Grisham book
published by Random House, signing the credit card slip with her Bic pen. Chicken-of the Sea
tuna is made by Chicken of the Sea International, which is besed in Thailand. Japan's Kao owns
Jergen's. Penquin Random House, and Pearson plc of the UK owns ·Japan's Bridgestone
Corporation owns Firestone. BP of the United Kingdom owns BP gas stations. After leaving his
office, Jesse stops at the BP gas station to fili his gas tank and checks the air pressure in his
Firestone tires. He heads to the liquor store for a cese of Miller Genuine thSpiderman movies
Sony Pictures Tolovision distrib- Draft beer and a bottle of Wild Turkey bourbon. He walks next
door to the sporting goods store to pick up someSABMiller plc of the United Kingdom produces
Miller Columbia Pictures, owned by Sony of Japan, released utes Breaking Bad. Wilson
racquetballs for his workouts next week. boer, Ann's favorite TV show, Breaking Bad, is just
startinDavide Campari of Italy awns the Wild Turkay brand. comes in the door, so she pours
hersalf a glass af Amer Group of Finland owns Wilsan Sporting Goods. and turns on their Philips
high-. Baringer Winery of Napa, California, is owned by definition talevision while Jasse
prepares dinner loads the latest Spiderman installment onto his computer and down- Australia's
Treesury Wine Estates While this may sound like a very typical evening for many Philips
televisions are sold by Philips of the Americans, foreign-owned firms praduced nearly every item

2. the Osbornes purchased or consumed: Trader Joe's is owned by a family trust sot up by German
businessman Theo Albrecht. This simple example reflects the impact of extensive for- eign
investments in the United States, especially in recent years. Evan some of the bast-known
"American products and . Leo Burnott Worldwide is ownod by Publicis of Franc brands are now
produced by foraign firms Investments have also flowed outward from the United Sony Music of
Japan produces and distributes Adam States. U.S. companies such as Coca-Cola, Starbucks,
McDonald's, the Gap, Microsoft, and Levi's are found in Japan, South Korea, China, Australia,
Singapore, and nearly Jeeps are a brand of vehicles made by Chrysler, which is every European
nation. US. companies have also purchased Lambert's CDs . Japan's Alps Electric preduces
Alpine car stereos. owned by ltaly's Fiat. a renge of foreign companies and brands. . The British-
Dutch company Royal Dutch Shell owns Questions Shell. 1. Should it mattar to consumers
whether the c . Nestlé of Switzerland produces Alpo, Arrowhead, Butterfinger Carmation Instant
Breakfast, CoffeeMate hat make their products are based in the consumers Friskies, Hot Pockets,
PowerBar, Stouffer's Lean Cuisine, home country or not? Explain your rationale. Toll House,
and Tidy Cat 2. Why has there been almost no negative backlash among Americans to the flood
of foreign investment into their Unilever, a British-Dutch multinational, makes Slim-Fast, Dove
soap, Hellmann's, Ragu. Q-tips, Lipton, Vaseline, and Ben & Jerry's. Sources: From company
websites (Fabruary 20a.
Solution
1. I believe this should not matter because America has its own International trade policies which
basically focuses on importing that product which can give economic advantage to the country
and also export some products to earn and grow business in the other country. SO the availability
of any product in the country is because the external company which is selling the product in
America is one of the best in making that and also enjoys economies of scale and so offer the
product at minimal cost.
2. Because people are educated enough to understand that the foreign investment will help in
upgrading the technological development more in the country. That will lead to a better standard
of living and better job opportunities.