Copper Corporation, a calendar year C corporation, owns stock in Bronze Corporation and has net operating income of $900,000 for the current year. Bronze Corporation pays Copper a dividend of $150,000. What amount of dividends received deduction may Copper claim if it owns 85% of Bronze stock (and the two corporations are members of the same affiliated group)? (Assume Copper's dividends received deduction is not limited by its taxable income.)
A) $75,000
B) $97,500
C) $120,000
D) $150,000
E) None of these.

Question

Quizplus · Accepted Answer

Since Copper Corporation owns 85% of Bronze Corporation and they are members of the same affiliated group, Copper is eligible to claim a 100% dividends received deduction for the $150,000 dividend received from Bronze.

Copper Corporation, a Calendar Year C Corporation, Owns Stock in Bronze