A personal service corporation engaged in health care has $250,000 of accumulated earnings and profits at the end of 2008.During 2009, the corporation accumulated an additional $80,000 of after-tax earnings.The corporation at the end of 2009 can justify the retention of $290,000 for its reasonable needs of the business.The amount subject to the § 531 tax in 2009 is

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The corporation has $330,000 in accumulated earnings ($250,000 from 2008 plus $80,000 from 2009). Since it can justify retaining $290,000, the excess $40,000 is subject to the § 531 tax.

A Personal Service Corporation Engaged in Health Care Has $250,000