Determine the dividends received deduction in each of the following situations. Assume that none of the...
Determine the dividends received deduction in each of the following situations. Assume that none of the corporate shareholders owns 20% or more of the corporations paying the dividends.
|
Red |
Purple |
Orange |
|
|
Income from operations |
$450,000 |
$550,000 |
$550,000 |
|
Expenses from operations |
350,000 |
600,000 |
560,000 |
|
Qualifying dividends |
100,000 |
100,000 |
100,000 |
Homework Answers
a. The dividends received deduction for Red Corporation is $50000
b. The dividends received deduction for Purple Corporation is $50000
c. The dividends received deduction for Orange Corporation is $45000
|
Red |
purple |
Orange |
|
|
Taxable Income (before DRD) |
200000 |
50000 |
90000 |
|
Step 1: (dividend * deduction %) |
50000 |
50000 |
50000 |
|
Step 2: (tax income* deduction %) |
100000 |
25000 |
45000 |
|
Step 3: (deduct lesser of step 1 or step 2, UNLESS NOL rule applies) |
200000-50000 = Positive, the value of step 2 should be deducted, that is, $50000 |
50000-50000= 0 NOL rule applies. Therefore, entire $50000 should be deducted |
90000-50000= positive, the value of step 2 should be deducted, that is, $45000 |
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Determine the dividends received deduction in each of the
following situations. Assume that none of the...
49. LO.2 In each of the following independent situations, determine the dividends received deduction for the...
49. LO.2 In each of the following independent situations, determine the dividends received deduction for the calendar year C corporation. Assume that none of the corporate shareholders owns 20% or more of the stock in the corporations paying the dividends. Almond Corporation Banana Corporation Cherry Corporation $ 900,000 Income from operations Expenses from operation Qualifying dividends $ 700,000 (600,000) 100,000 $ 800,000 (860,000) 100,000 (910,000) 100,000
In each of the following independent situations, determine the dividends received deduction for the calendar year C corp...
In each of the following independent situations, determine the
dividends received deduction for the calendar year C
corporation.
The Rose Corporation owns 15%, Pansy owns 10% and Daffodil owns
55% of the stock in the corporations paying the dividends.
Rose
Corporation
Pansy
Corporation
Daffodil
Corporation
Income from operations
$1,200,000
$1,200,000
$1,200,000
Expenses from operations
(800,000)
(1,300,000)
(1,500,000)
Qualifying dividends
400,000
400,000
400,000
The dividends received deduction for Pansy Corporation is
EXHIBIT 12.5 Dividends Received Deduction Percentage of Ownership by Corporate...
Question 26 The dividends-received deduction is designed to reduce double taxation of corporate dividends payable to...
Question 26 The dividends-received deduction is designed to reduce double taxation of corporate dividends payable to individual shareholders. True False Henry transfers property with an adjusted basis of $90,000 and an FMV of $100,000 to a newly-formed corporation in a Sec. 351 exchange. Henry receives stock with an FMV of $80,000 and a short-term note with a $20,000 FMV. Henry's recognized gain is $0. $5,000 $20,000 $10,000 Sun and Moon Corporations each have only one class of stock outstanding. Their...
Crane and Loon Corporations, two unrelated C corporations, have the following transactions for the current year...
Crane and Loon Corporations, two unrelated C corporations, have the following transactions for the current year Crane Loon Gross income from operations Expenses from operations Dividends received from domestic corporations (15% ownership) $186,000 260,400 111,600 $297,600 312,480 223,200 Click here to access the dividends received deduction table. a. Compute the dividends received deduction for Crane Corporation. b. Compute the dividends received deduction for Loon Corporation. $ EXHIBIT 3.2 Dividends Received Deduction Percentage of Ownership by Corporate Shareholder Deduction Percentage 50%...
Crane and Loon corporations, two unrelated calendar year C corporations, have the following transactions for the...
Crane and Loon corporations, two unrelated calendar year C corporations, have the following transactions for the current year: Crane Loon Gross income from operations $180,000 $300,000 Expenses from operations 255,000 310,000 Dividends received from domestic corporations (15% ownership) 100,000 230,000 a. Compute the dividends received deduction for Crane Corporation. b. Compute the dividends received deduction for Loon Corporation.
Kaspar and Ludger, two unrelated calendar year corporations, have the following transactions for 2019: Kaspar Corporation...
Kaspar and Ludger, two unrelated calendar year corporations, have the following transactions for 2019: Kaspar Corporation Ludger Corporation Gross income from operations $180,000 $300,000 Expenses from operations $255,000 $310,000 Dividends received from domestic corporations (15% ownership) $100,000 $230,000 Taxable income before the dividends received deduction $25,000 $220,000 Determine the dividends received deduction for both companies.
2. Which of the following statements is incorrect regarding the dividends received deduction? a. A corporation...
2. Which of the following statements is incorrect regarding the dividends received deduction? a. A corporation must hold stock for more than 90 days in order to qualify for a deduction with respect to dividends on such stock. b. The taxable income limitation does not apply with respect to the 100% deduction available to members of an affiliated group c. If a stock purchase is financed 75% by debt, the deduction for dividends on such stock is reduced by 75%....
Which of the following statements is incorrect regarding the dividends received deduction? a. The taxable income...
Which of the following statements is incorrect regarding the dividends received deduction? a. The taxable income limitation does not apply if the normal deduction (i.e., 50% or 65% of dividends) results in a net operating loss for the corporatio Ob. If a stock purchase is financed 75% by debt, the deduction for dividends on such stock is reduced by 75%. c. The taxable income limitation does not apply with respect to the 100% deduction available to members of an affiliated...
Exercise 12-7 (LO. 7) Crane and Loon Corporations, two unrelated C corporations, have the following transactions...
Exercise 12-7 (LO. 7) Crane and Loon Corporations, two unrelated C corporations, have the following transactions for the current year. Gross income from operations Expenses from operations Dividends received from domestic corporations (15% ownership) stic corporations (15% ownership) Crane $180,000 255,000 100,000 Loon $300,000 310,000 230,000 Click here to access the dividends received deduction table. a. Compute the dividends received deduction for Crane Corporation. $ 50,000 b. Compute the dividends received deduction for Loon Corporation.
No resultsOptions Exercise 3-27 (Algorithmic) (LO. 2) Crane and Loon Corporations, two unrelated C corporations, have...
No resultsOptions Exercise 3-27 (Algorithmic) (LO. 2) Crane and Loon Corporations, two unrelated C corporations, have the following transactions for the current year Gross income from operations Expenses from operations Dividends received from domestic corporations (15% ownership) Crane $231,000 323,400 138,600 Loon 369,600 388,08o 277,200 Click here to access the dividends received deduction table. a. Compute the dividends received deduction for Crane Corporation. b. Compute the dividends received deduction for Loon Corporation 6 EXHIBIT 3.2 Dividends Received Deduction Percentage of...
49. LO.2 In each of the following independent situations, determine the dividends received deduction for the calendar year C corporation. Assume that none of the corporate shareholders owns 20% or more of the stock in the corporations paying the dividends. Almond Corporation Banana Corporation Cherry Corporation $ 900,000 Income from operations Expenses from operation Qualifying dividends $ 700,000 (600,000) 100,000 $ 800,000 (860,000) 100,000 (910,000) 100,000
In each of the following independent situations, determine the
dividends received deduction for the calendar year C
corporation.
The Rose Corporation owns 15%, Pansy owns 10% and Daffodil owns
55% of the stock in the corporations paying the dividends.
Rose
Corporation
Pansy
Corporation
Daffodil
Corporation
Income from operations
$1,200,000
$1,200,000
$1,200,000
Expenses from operations
(800,000)
(1,300,000)
(1,500,000)
Qualifying dividends
400,000
400,000
400,000
The dividends received deduction for Pansy Corporation is
EXHIBIT 12.5 Dividends Received Deduction Percentage of Ownership by Corporate...
Question 26 The dividends-received deduction is designed to reduce double taxation of corporate dividends payable to individual shareholders. True False Henry transfers property with an adjusted basis of $90,000 and an FMV of $100,000 to a newly-formed corporation in a Sec. 351 exchange. Henry receives stock with an FMV of $80,000 and a short-term note with a $20,000 FMV. Henry's recognized gain is $0. $5,000 $20,000 $10,000 Sun and Moon Corporations each have only one class of stock outstanding. Their...
Crane and Loon Corporations, two unrelated C corporations, have the following transactions for the current year Crane Loon Gross income from operations Expenses from operations Dividends received from domestic corporations (15% ownership) $186,000 260,400 111,600 $297,600 312,480 223,200 Click here to access the dividends received deduction table. a. Compute the dividends received deduction for Crane Corporation. b. Compute the dividends received deduction for Loon Corporation. $ EXHIBIT 3.2 Dividends Received Deduction Percentage of Ownership by Corporate Shareholder Deduction Percentage 50%...
2. Which of the following statements is incorrect regarding the dividends received deduction? a. A corporation must hold stock for more than 90 days in order to qualify for a deduction with respect to dividends on such stock. b. The taxable income limitation does not apply with respect to the 100% deduction available to members of an affiliated group c. If a stock purchase is financed 75% by debt, the deduction for dividends on such stock is reduced by 75%....
Which of the following statements is incorrect regarding the dividends received deduction? a. The taxable income limitation does not apply if the normal deduction (i.e., 50% or 65% of dividends) results in a net operating loss for the corporatio Ob. If a stock purchase is financed 75% by debt, the deduction for dividends on such stock is reduced by 75%. c. The taxable income limitation does not apply with respect to the 100% deduction available to members of an affiliated...
Exercise 12-7 (LO. 7) Crane and Loon Corporations, two unrelated C corporations, have the following transactions for the current year. Gross income from operations Expenses from operations Dividends received from domestic corporations (15% ownership) stic corporations (15% ownership) Crane $180,000 255,000 100,000 Loon $300,000 310,000 230,000 Click here to access the dividends received deduction table. a. Compute the dividends received deduction for Crane Corporation. $ 50,000 b. Compute the dividends received deduction for Loon Corporation.
No resultsOptions Exercise 3-27 (Algorithmic) (LO. 2) Crane and Loon Corporations, two unrelated C corporations, have the following transactions for the current year Gross income from operations Expenses from operations Dividends received from domestic corporations (15% ownership) Crane $231,000 323,400 138,600 Loon 369,600 388,08o 277,200 Click here to access the dividends received deduction table. a. Compute the dividends received deduction for Crane Corporation. b. Compute the dividends received deduction for Loon Corporation 6 EXHIBIT 3.2 Dividends Received Deduction Percentage of...
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