Rocco Corporation, a C corporation, owns 60% of the stock of Bien Corporation. Bien Corporation is a French corporation which conducts all of its business in France. Bien pays a $100,000 dividend to Rocco Coorporation. Rocco Corporation will have a 100% dividend received deduction on these dividends, resulting no tax on these dividends.

Question

Quizplus · Accepted Answer

Rocco Corporation is a C corporation, which means that it is taxed on its worldwide income. However, Rocco Corporation is entitled to a 100% dividend received deduction on dividends received from Bien Corporation, which is a foreign corporation. This means that Rocco Corporation will not pay any tax on the $100,000 dividend it receives from Bien Corporation.

Rocco Corporation, a C Corporation, Owns 60% of the Stock