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The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) reduced the individual tax rate on corporate dividends received to 15% for individuals in the 25%, 28%, 33% and 35% tax brackets (5% (0% in 2008) for individuals in the 15% and 10% income tax brackets); this affords some planning strategies for closely held corporations that want to reduce their accumulated earnings and profits (E&P). CPAs should become aware of some of these opportunities.
The bane of corporate taxation always has been the double taxation of corporate earnings. So, this may be a good time for some corporate taxpayers to minimize ("bail out") E&P by distributing …