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Authors

Harvey Mahlig

Abstract

There are many small corporations, the ownership o fwhich is in the hands of a family group or a few individuals, which are susceptible to personal holding company rules. These require a careful analysis of stock ownership and gross income. While it may not have been the intention of an individual or of a group to form a personal holding company, circumstances may arise during a year which would qualify the corporation as one. A change in stock ownership, a change in the type of gross income or a change in the amount of gross income could very well transform an operating company into a personal holding company. This transformation often goes unobserved. When it is not recognized, a penalty for the failure to file a personal holding company return can be imposed.

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