Corporation A receives a dividend from Corporation B. Corporation A includes the dividend in its gross income for tax and financial accounting purposes (no book-tax difference). If A has accounted for the dividend correctly (following the general rule), how much of B stock does A own?

Question

Quizplus · Accepted Answer

Corporation A includes the dividend in its gross income without any book-tax difference, indicating it likely owns less than 20% of Corporation B's stock, as this ownership level typically does not qualify for the dividends received deduction that would create a book-tax difference.

Corporation a Receives a Dividend from Corporation B