QuickBooks Dictionary
Personal holding company
A personal holding company is a close corporation organized to hold corporate stocks and bonds and the investment assets, including personal service contracts, and employed to retain the income for distribution at such time as is most advantageous to the individual stockholder from a tax viewpoint. The Code prescribes percentages of certain types of gross income and of stock ownership by five or fewer individuals that will turn an ordinary corporation into a personal holding company. If it falls within this classification, a corporation must pay, in addition to the regular income tax on a corporation, a tax at the rate of 15 percent on its undistributed personal holding company income.