Is this corporation taxed as a C or S Corp?
if a C-Corp
does it meet the definition of a personal Holding company under IRC 542
(a)General rule
For purposes of this subtitle, the term “personal holding company” means any corporation (other than a corporation described in subsection (c)) if—
(1)Adjusted ordinary gross income requirement
At least 60 percent of its adjusted ordinary gross income (as defined in section 543(b)(2)) for the taxable year is personal holding company income (as defined in section 543(a)), and
(2)Stock ownership requirement
At any time during the last half of the taxable year more than 50 percent in value of its outstanding stock is owned, directly or indirectly, by or for not more than 5 individuals. For purposes of this paragraph, an organization described in section 401(a), 501(c)(17), or 509(a) or a portion of a trust permanently set aside or to be used exclusively for the purposes described in section 642(c) or a corresponding provision of a prior income tax law shall be considered an individual.
a C-corp that is a PHC faces special taxes.
