Personal Holding Company question


B

Bob

Interest received by a natural person who is in the business
of lending money and buying/selling mortgages is not
portfolio income, it is self-employment income. Does that
imply that such interest, when received by a C corporation
in the same line of business, is not personal holding
company income?
 
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R

Robert Daniels

Bob said:
Interest received by a natural person who is in the business
of lending money and buying/selling mortgages is not
portfolio income, it is self-employment income. Does that
imply that such interest, when received by a C corporation
in the same line of business, is not personal holding
company income?
No, it does not imply that. Interest received by a closely
held corporation is generally personal holding company
income, Tax Code Sec. 543(a)(1). A separate rule [Sec.
542(c)(6)] says that a lending/finance company is not a
personal holding company if it meets certain ratio tests as
to sources of income and types of deductions.

Bob Daniels ("The Tax Code -- software written by lawyers.")
 
Last edited by a moderator:

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