In the current year, Azul Corporation, a calendar year C corporation, received a dividend of $30,000 from Naranja Corporation. Azul owns 25% of the Naranja Corporation stock. Assuming it is not subject to the taxable income limitation, Azul's dividends received deduction is $19,500.

Question

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Azul Corporation is eligible for a 65% dividends received deduction because it owns more than 20% but less than 80% of Naranja Corporation. Therefore, 65% of $30,000 is $19,500.

In the Current Year, Azul Corporation, a Calendar Year C