Turtle Corporation, owns 15% of the stock Metro Corporation and has taxable income of $100,000 for...

Turtle Corporation, owns 15% of the stock Metro Corporation and has taxable income of $100,000 for the year before considering the dividends received deduction. During the year Turtle receives a dividend of $30,000 from Metro, which was considered in calculating the $100,000. What amount of dividends received deduction may Turtle claim?

Select one:

a. $0

b. $40,000

c. $65,000

d. $84,500

e. None of these.

Solutions

Expert Solution

Correct answer is e) None of these

Upto the ownership of 20% Dividend received by a corproation from another corporation is allowed for a deduction of 70%. and if ownership is above 20% deduction is allowed upto 85% and more than 80% ownership, 100% deduction is allowed.

In the given situation ownership is 15% in metro corporation.So, dividend received deduction allowed is 70% of $30,000

=$30,000*70%

Dividend received deduction=$21,000

ekkarill92 answered 2 years ago

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