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Technology Stocks : Intel Corporation (INTC)
INTC 41.14-3.4%Jan 8 3:59 PM EST

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To: The Duke of URL© who wrote (178788)7/21/2004 12:39:57 PM
From: rkral  Read Replies (1) of 186894
 
Duke, re "But lurking in the background is the Accumulated earnings tax which is, IIRC, 50 to 70%!!! MS has already had discourse with the IRS about this over the years. This is the key: A company is allowed to accumulate but not distribute earnings IF there is a need for the money, without tax consequences."

Then how do you explain this definition?

"accumulated earnings tax -- An additional tax on earnings that a business retains in an attempt to avoid the higher income taxes the owners would be subject to if the earnings were paid out to them as dividends."
investorwords.com

Perhaps you meant to say a company is allowed to distribute but not accumulate earnings UNLESS there is a need for the money, without tax consequences.

Ron
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