Island Corporation has the following income and expense items for the year: $\begin{array}{|l|l|}
\hline \text { Gross receipts from sales }&\$60,000\
\hline \text { Dividends received from } 15 \% \text { owned domestic } & \
\text { corporation } & 40,000 \
\hline \text { Expenses connected with sales } & 30,000\
\hline
\end{array}$ The taxable income of Island Corporation is

Question

Island Corporation has the following income and expense items for the year: $\begin{array}{|l|l|}
\hline \text { Gross receipts from sales }&\$60,000\
\hline \text { Dividends received from } 15 \% \text { owned domestic } & \
\text { corporation } & 40,000 \
\hline \text { Expenses connected with sales } & 30,000\
\hline 
\end{array}$ The taxable income of Island Corporation is

Quizplus · Accepted Answer

Taxable income is calculated as gross receipts from sales ($60,000) minus expenses connected with sales ($30,000), plus dividends received ($40,000) with a 50% dividends received deduction for less than 20% ownership, resulting in $50,000.

Island Corporation Has the Following Income and Expense Items for the Year