During the 2020, Goose Corporation (a calendar year, cash basis taxpayer) receives cash dividends as follows. $$\begin{array} { l c c }
\text { Source of Dividends } & \begin{array} { c }
\text { Ownership } \
\text { Percentage }
\end{array} & \text { Dividends } \
\text { Emu Corporation } & 90 \% & \$ 90,000 \
\text { Robin Corporation } & 21 \% & 60,000 \
\text { Crane Corporation } & 10 \% & 30,000
\end{array}$$ If it is presumed that the taxable income limitation does not apply, Goose Corporation's dividends received deduction for 2020 is:

Question

During the 2020, Goose Corporation (a calendar year, cash basis taxpayer) receives cash dividends as follows. $$\begin{array} { l c c } 
\text { Source of Dividends } & \begin{array} { c } 
\text { Ownership } \
\text { Percentage }
\end{array} & \text { Dividends } \
\text { Emu Corporation } & 90 \% & \$ 90,000 \
\text { Robin Corporation } & 21 \% & 60,000 \
\text { Crane Corporation } & 10 \% & 30,000
\end{array}$$ If it is presumed that the taxable income limitation does not apply, Goose Corporation's dividends received deduction for 2020 is:

Quizplus · Accepted Answer

For corporations receiving dividends from other corporations, the dividends received deduction (DRD) depends on the ownership percentage. For ownership less than 20%, the DRD is 50% of the dividends received; for ownership between 20% and 80%, the DRD is 65%; and for ownership of 80% or more, the DRD is 100%. Applying these rates:- Emu Corporation (90% ownership): 100% of $90,000 = $90,000- Robin Corporation (21% ownership): 65% of $60,000 = $39,000- Crane Corporation (10% ownership): 50% of $30,000 = $15,000Adding these amounts gives a total DRD of $144,000.

During the 2020, Goose Corporation (A Calendar Year, Cash Basis