The Dawg corporation owns 13% of Company A and 23% of Company B. Dividends received from...

The Dawg corporation owns 13% of Company A and 23% of Company B. Dividends received from Company A were $104,000 and from Company B were $243,000. If Dawg's "adjusted" taxable income is $2,000,000, calculate Dawg's taxable income after including the dividend information.

Solutions

Expert Solution

In case of 13% owning:

Since this is less than 20%, there will be 70% deduction.

Therefore, the deduction amount = Dividends × 0.70

= $104,000 × 0.70

= $72,800

In case of 23% owning:

Since this is more than 20%, there will be 80% deduction.

Therefore, the deduction amount = Dividends × 0.80

= $243,000 × 0.80

= $194,400

Total deduction = 72,800 + 194,400 = $267,200

This is to be deducted from income to the answer.

Taxable income = Adjusted income – Total deduction

= $2,000,000 - $267,200

= $1,732,800 (Answer)

ekkarill92 answered 2 hours ago

Next > < Previous

Related Solutions

The Dawg corporation owns 7.000000000000001% of Company A and 32.99999999999999% of Company B. Dividends received from...

The Dawg corporation owns 7.000000000000001% of Company A and 32.99999999999999% of Company B. Dividends received from Company A were $116,000 and from Company B were $212,000. If Dawg's "adjusted" taxable income is $2,000,000, calculate Dawg's taxable income after including the dividend information.

Dividends received from a domestic corporation are totally sourced to the U.S. if: a. the corporation earns...

Dividends received from a domestic corporation are totally sourced to the U.S. if: a. the corporation earns at least 80% of its gross income over the immediately preceding three tax years from the active conduct of a U.S. trade or business. b. the corporation earns at least 25% of its gross income over the immediately preceding three tax years from the active conduct of a U.S. trade or business. c. the corporation earns no more than 80% of its gross income over the...

If Corporation A receives dividends from Corporation B, the dividends would be subject to triple taxation....

If Corporation A receives dividends from Corporation B, the dividends would be subject to triple taxation. What tax provision is available to corporations that would prevent or minimize triple taxation? Briefly explain.

Which does not increase the E & P of a corporation? a. Dividends received deduction b....

Which does not increase the E & P of a corporation? a. Dividends received deduction b. Collection of proceeds from an insurance policy on the life of a key employee c. Federal income tax refund d. Charitable contributions in excess of 10% limitation e. None of the above

22. Dividend Revenue is never recorded for dividends received from an Equity Method Investment. 23. Under...

22. Dividend Revenue is never recorded for dividends received from an Equity Method Investment. 23. Under the equity method, the Equity Method Investment account is being adjusted for the investor’s share (ownership %) of changes in the investee company’s equity. When the investee company reports earnings, the investee company’s equity increases and the value of the Equity Method Investment on the investor’s balance sheet will ___________________. When the investee company pays dividends to its shareholders, the investee company’s equity decreases...

McVeigh Corp. owns 40% of Gondor Company's common stock. McVeigh received $41,200 in cash dividends from...

McVeigh Corp. owns 40% of Gondor Company's common stock. McVeigh received $41,200 in cash dividends from Gondor. The entry to record the cash dividend received from Gondor would include a: 1-Credit to Equity Method Investments for $103,000. 2- Credit to Equity Method Investments for $41,200. 3- Credit to Cash for $41,200. 4- Debit to Dividend Revenue for $41,200. 5- Debit to Dividends for $103,000.

Comment on the following statement in detail: Dividends received by a corporation on an investment in...

Comment on the following statement in detail: Dividends received by a corporation on an investment in the common and preferred stock of another corporation, where ownership in the dividend paying corporation is less than 20%, is subject to 70 percent exclusion for tax purposes.

Griffin Corporation received $50,000 of dividend income from Eagle, Inc. Griffin owns 5 percent of the...

Griffin Corporation received $50,000 of dividend income from Eagle, Inc. Griffin owns 5 percent of the outstanding stock of Eagle. Griffin’s marginal tax rate is 21 percent. Calculate Griffin’s allowable dividends-received deduction and its after-tax cash flow as a result of the dividend from Eagle. How would your answers to a change if Griffin owned 55 percent of the stock of Eagle? How would your answers to b change if Griffin owned 85 percent of the stock of Eagle?

Question 1 1.1 Company A owns 60% of Company B and Company B owns 30% of...

Question 1 1.1 Company A owns 60% of Company B and Company B owns 30% of the ordinary shares of Company C Discuss the theory that refers to this situation and the degree of influence and control that Company A has over both the companies. 1.2 Company X owns 40% of Company Y and Company Y owns 30% of the ordinary shares of Company Z Discuss the theory that's refers to this situation and the degree of influence and control...

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 2020 taxable income (loss) without the dividend income or the DRD is $10,000. b. WC’s 2020 taxable income (loss) without the dividend income or the DRD is $(10,000). c. WC’s 2020 taxable income (loss) without the dividend income or the DRD is $(101,000).

Subjects