- 30 - with respect to petitioner’s retained earnings constituted the reason such earnings were retained and not distributed. On the credible evidence before us, even if petitioner were regarded as a mere holding company for purposes of the accumulated earnings tax, and even if petitioner were regarded as having accumulated earnings beyond the reasonable needs of its business, the evidence establishes that petitioner did not accumulate its earnings during its 1996 and 1997 short taxable years before us for the purpose of avoiding the Federal income tax with respect to its shareholders. We conclude that for the short taxable years in issue petitioner did not permit its earnings and profits to accumulate for the purpose of avoiding the Federal income tax with respect to its shareholders. Petitioner is not subject to the accumulated earnings tax for the years in issue. Decision will be entered for petitioner.Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
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