Zhao (an individual) and nine other unrelated individuals own all of Duck Corporation’s stock. The following information pertains to Duck for the current year:
Adjusted ordinary gross income ………………………… $390,000
Ordinary gross income ………………………………….. 450,000
Personal holding company income ……………………… 284,000
Taxable income …………………………………………. 195,000
In each of the following independent cases, determine whether Duck qualifies as a personal holding company for the current year.
a. Zhao owns 19% of Duck’s stock and each of the nine other individuals owns 9% of Duck’s stock.
b. Zhao owns 10% of Duck’s stock and each of the nine other individuals owns 10% of Duck’s stock.
c. Zhao owns 9.1% of Duck’s stock and each of the nine other individuals owns 10.1% of Duck’s stock.