Avalanche Corporation has $70,000 of net income from operations during the current year.In addition it received $180,000 of dividend income from another corporation in which it has a 10% ownership interest.What is Avalanche's dividends received deduction for this year?

Question

Quizplus · Accepted Answer

The dividends received deduction (DRD) for a corporation with less than 20% ownership is 50% of the dividends received. Therefore, Avalanche Corporation can deduct 50% of $180,000, which is $90,000.

Avalanche Corporation Has $70,000 of Net Income from Operations During