Pane Corporation owns 100% of Alder Corporation, 85% of Ball Corporation, 70% of Cake Corporation, 40% of Dash Corporation, and 10% of Eager Corporation. All of these corporations are domestic corporations. Pane, Alder and Ball belong to an affiliated group. Pane's marginal income tax rate is 35%. All investees have paid out all their net income in the form of dividends. During 2014, Pane Corporation received the following cash dividends:
Required:
1. Compute the amount of the dividend income that would be excluded from taxation under the current Internal Revenue Code.
2. Compute Pane's current income tax liability for the dividend income received in 2014.

Question

Pane Corporation owns 100% of Alder Corporation, 85% of Ball Corporation, 70% of Cake Corporation, 40% of Dash Corporation, and 10% of Eager Corporation. All of these corporations are domestic corporations. Pane, Alder and Ball belong to an affiliated group. Pane's marginal income tax rate is 35%. All investees have paid out all their net income in the form of dividends. During 2014, Pane Corporation received the following cash dividends:
  Required:
1. Compute the amount of the dividend income that would be excluded from taxation under the current Internal Revenue Code.
2. Compute Pane's current income tax liability for the dividend income received in 2014.

Quizplus · Accepted Answer

The Answer of Pane Corporation owns 100% of Alder Corporation, 85% of Ball Corporation, 70% of Cake Corporation, 40% of Dash Corporation, and 10% of Eager Corporation. All of these corporations are domestic corporations. Pane, Alder and Ball belong to an affiliated group. Pane's marginal income tax rate is 35%. All investees have paid out all their net income in the form of dividends. During 2014, Pane Corporation received the following cash dividends:
  Required:
1. Compute the amount of the dividend income that would be excluded from taxation under the current Internal Revenue Code.
2. Compute Pane's current income tax liability for the dividend income received in 2014.

Pane Corporation Owns 100% of Alder Corporation, 85% of Ball