The Sapote Corporation is a manufacturing corporation. The corporation has accumulated earnings of $450,000 and the corporation
cannot establish a reasonable business need for any of that amount. What is the amount of the accumulated earnings tax (if any) that will be imposed on the corporation?
As this is a manufacturing company, they are exempt of Accumulated earnings tax of the amount of $250,000. Anything above that will be subject to an Accumulated Earnings tax rate of 20%.
