The Bay Fig Corporation has $350,000 of taxable income from operations for the current year, and dividends of $50,000 received from 10-percent-owned domestic corporations. How much is the Bay Fig Corporation's dividends received deduction for the current year?

Question

Quizplus · Accepted Answer

The dividends received deduction for a corporation that owns less than 20% of the distributing corporation is 50% of the dividends received. Therefore, for $50,000 in dividends, the deduction would be 50% of $50,000, which equals $25,000.

The Bay Fig Corporation Has $350,000 of Taxable Income from Operations