ZuoTi.Pro
Question

Corporation A receives a dividend from Corporation B. Corporation A includes the dividend in its gross...

Corporation A receives a dividend from Corporation B. Corporation A includes the dividend in its gross income for tax and financial accounting purposes (no book-tax difference). If A has accounted for the dividend correctly (following the general rule), how much of B stock does A own?

A) A owns less than 20 percent of the stock of B

B) A owns at least 20 percent but not more than 50 percent of the stock of B

C) A owns more than 50 percent of the stock of B

D) Cannot be determined

Please explain.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer : option (A)

A owns less than 20% of the stock of B

Explanation : Corporations include dividends from corporations in which they own less than 20 percent in both taxable and financial income. There is no book-tax difference.

0 0
Add a comment
Know the answer?
Add Answer to:
Corporation A receives a dividend from Corporation B. Corporation A includes the dividend in its gross...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Riverbend Inc. received a $327,500 dividend from stock it held in Hobble Corporation. Riverbend's taxable income...

    Riverbend Inc. received a $327,500 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $2,200,000 before deducting the dividends received deduction (DRD), a $62,500 NOL carryover, and a $148,000 charitable contribution. EXHIBIT 16-6 Stock Ownership and Dividends Received Deduction Percentage Receiving Corporation’s Stock Ownership in Distributing Corporation’s Stock Dividends Received Deduction Percentage Less than 20 percent    50% At least 20 percent but less than 80 percent 65 80 percent or more* 100   a. What is Riverbend’s...

  • Riverbend Inc. received a $282,500 dividend from stock it held in Hobble Corporation. Riverbend's taxable income...

    Riverbend Inc. received a $282,500 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $2,330,000 before deducting the dividends received deduction (DRD), a $69,000 NOL carryover, and a $101,000 charitable contribution. Use Exhibit 16-6. (Round your tax rates to 1 decimal place. Leave no answer blank. Enter zero if applicable.) a. What is Riverbend’s deductible DRD assuming it owns 10 percent of Hobble Corporation? b. Assuming the facts in part (a), what is Riverbend’s marginal tax rate...

  • Riverbend Inc. recelved a $222,500 dividend from stock It held In Hobble Corporation. Riverbend's taxable Income...

    Riverbend Inc. recelved a $222,500 dividend from stock It held In Hobble Corporation. Riverbend's taxable Income Is $2,800,000 before deducting the dividends recelved deduction (DRD), a $80,000 NOL carryover, and a $147000 charltable contribution. Use Exhlbit 16-6. (Round your tex rates to 1 decimal plece. Leave no answer blank. Enter zero If applicable.) Dividends Received Deductionn Percentage A0% Receiving Corporation's Stock Ownership in Distributing Corporation's Stock Less than 20 percent At least 20 percent but less than 80 percent 80...

  • Riverbend Inc. recelved a $267,500 dividend from stock It held In Hobble Corporation. Riverbend's taxable Income...

    Riverbend Inc. recelved a $267,500 dividend from stock It held In Hobble Corporation. Riverbend's taxable Income is $2 440,000 before deducting the dividends recelved deduction (DRD), a $45,000 NOL carryover, and a $137,000 charitable contribution. Use Exhiblt 16-6. (Round your tex rates to 1 decimal place. Leave no answer blank. Enter zero If eppllcable.) a. What Is Riverbend's deductible DRD assuming It owns 10 percent of Hobble Corporation? b. Assuming the facts In part (a), what Is Riverbend's effective tax...

  • JDog Corporation owns stock in Oscar Inc. valued at $2,000,000 at the beginning of the year...

    JDog Corporation owns stock in Oscar Inc. valued at $2,000,000 at the beginning of the year and $2,200,000 at year-end. JDog received a $10,000 dividend from Oscar Inc. What temporary book–tax differences associated with its ownership in Oscar stock will JDog report for the year in the following alternative scenarios (income difference only—ignore the dividends-received deduction)? (Leave no answer blank. Enter zero if applicable.) a. JDog owns 5 percent of the Oscar Inc. stock. Oscar's income for the year was...

  • Problem 19-33 Cardinal Corporation, a calendar year taxpayer, receives dividend income of $250,000 from a corporation...

    Problem 19-33 Cardinal Corporation, a calendar year taxpayer, receives dividend income of $250,000 from a corporation in which it holds a 10% interest. Cardinal also receives interest income of $35,000 from municipal bonds. (The municipality used the proceeds from the bond issue to construct a library.) Cardinal borrowed funds to purchase the municipal bonds and pays $20,000 of interest on the loan. Excluding these three items, Cardinal's taxable income is $500,000. Cardinal has $150,000 of accumulated E & P at...

  • Wasatch Corp. (WC) received a $200,000 dividend from Tager Corporation (TC). WC owns 15 percent of...

    Wasatch Corp. (WC) received a $200,000 dividend from Tager Corporation (TC). WC owns 15 percent of the TC stock. Compute WC’s deductible DRD in each of the following situations: a. WC’s taxable income (loss) without the dividend income or the DRD is $10,000. b. WC’s taxable income (loss) without the dividend income or the DRD is ($10,000). c. WC’s taxable income (loss) without the dividend income or the DRD is ($99,000). d. WC’s taxable income (loss) without the dividend income...

  • Riverbend Inc. received a $252,500 dividend from stock it held in Hobble Corporation. Riverbend's taxable income...

    Riverbend Inc. received a $252,500 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $2,550,000 before deducting the dividends received deduction (DRD), a $41,500 NOL carryover, and a $104,000 charitable contribution. a.What is Riverbend’s deductible DRD assuming it owns 10 percent of Hobble Corporation? b. Assuming the facts in part (a), what is Riverbend’s marginal tax rate on the dividend? c. What is Riverbend’s DRD assuming it owns 53 percent of Hobble Corporation? d. Assuming the facts...

  • NEWS M Gmail Mingle Corporation is a calendar year, accrual method taxpayer, organized in 2010, that...

    NEWS M Gmail Mingle Corporation is a calendar year, accrual method taxpayer, organized in 2010, that sells party products. Denise Rivers and her sister Shannon Jones own 100% of Mingle Corporation. All items were reported correctly for the current year financial statements. The attached spreadsheet shows the computation of financial statement net income for the current year. Mingle Corporation paid four timely estimates for federal income tax totaling $1,970,000. This was based on prior year federal income tax of $1,970,000....

  • A firm that owns the stock of another corporation does not have to pay taxes on...

    A firm that owns the stock of another corporation does not have to pay taxes on the entire amount of dividends received. In general, only 30 percent of the dividends received by one corporation from another are taxable. The purpose of this tax law feature is to mitigate the effect of triple taxation, which occurs when earnings are first taxed at the first firm, its dividends paid to the second firm are taxed again, and the dividends paid to shareholders...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT