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.

Expert Solution

tax provision is available to corporations that would prevent or minimize triple taxation is Dividends Received Deduction (DRD).

Under DRD, Corporation A can take deduction for dividends received from Corporation B while calculating Corporation A's taxable income.

The amount of deduction allowable shall depend on the Corporation's A holding percentage in Corporation B.

If Corporation A's holding in Corporation B is less than 20%, then the deduction shall be 70% of the dividend received.

If Corporation A's holding in Corporation B is from 20% and upto 80%, then the deduction shall be 80% of the dividend received.

If Corporation A's holding in Corporation B is more than 80%, then the deduction shall be 100% of the dividend received.

Suppose Corporation A's holding in Corporation B is 60% and dividend recieved from Corporation B is $15,000 , then the dividend received deduction (DRD) shall be 80% of $15,000 i.e. $12,000

ekkarill92 answered 1 year ago

Dividends Received Deduction Describe how the Dividends Received Deduction serves to mitigate triple taxation. Specifically comment...

Dividends Received Deduction Describe how the Dividends Received Deduction serves to mitigate triple taxation. Specifically comment on the criteria for claiming the DRD and the % ownership and rates that apply. Be sure to use the updated percentages under the TCJA

Which of the following are subject to double taxation? A. Corporation B. Partnership C. Sole proprietorship...

Which of the following are subject to double taxation? A. Corporation B. Partnership C. Sole proprietorship D. B and C

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.

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.

briefly define the scope of VAT in Botswana, The subject is taxation

13. Issuer Rating Yield Spread Treasury Benchmark Corporation A Triple A 7.87% 50 10 Corporation B...

13. Issuer Rating Yield Spread Treasury Benchmark Corporation A Triple A 7.87% 50 10 Corporation B Double A 7.77% 40 10 Corporation C Triple A 8.60% 72 30 Corporation D Double A 8.66% 78 30 Corporation E Triple B 9.43% 155 30 a. What is meant by rating? b. Which of the five bonds has the greatest credit risk? c. What is meant by spread? d. What is meant by Treasury benchmark? e. Why does each spread reported reflect a...

What is the effect of the pledge rule? a. the seller is subject to double taxation....

What is the effect of the pledge rule? a. the seller is subject to double taxation. b, the recognition of gain is accelerated .c. the OID interest rate rule applies d. The unstated interest rate rule applies

A property is subject to taxation at a rate of $2.69485 per $100 of value. If...

A property is subject to taxation at a rate of $2.69485 per $100 of value. If the property has an assessed value $275,000 the tax amount due would be? a. $74,108.38 b. $ 741.08 c. $7,410.84 d. $7,425.00 e. $7,140.84 Which of the following describes a Gross Lease? a. A lease in which the tenant pays rent plus defined operating expenses related to the property. b. An agreement in which the tenant pays a fixed amount of rent and some...

What is the relationship of inflation and taxation? Would taxation be considered as the tool to...

What is the relationship of inflation and taxation? Would taxation be considered as the tool to control money supply?

1.Which of the following describes the difference between S corporation taxation and C corporation taxation? a....

1.Which of the following describes the difference between S corporation taxation and C corporation taxation? a. None of the alternatives are correct. b. The shareholders of an C corporation are taxed on the entity level earnings whereas the shareholders of a S corporation are not taxed on the entity level earnings. c. The shareholders of an S corporation are taxed on the entity level earnings whereas the shareholders of a C corporation are not taxed on the entity level earnings....

Question