Jazz Corporation owns 50 percent of the Mitchell Corporation stock. Mitchell distributed a $17,000 dividend to Jazz Corporation. Jazz Corporations taxable income before the dividend was $100,700. What is the amount of Jazz's dividends received deduction on the dividend it received from Mitchell Corporation?

Question

Quizplus · Accepted Answer

Jazz Corporation owns 50% of Mitchell Corporation stock, therefore it is entitled to a dividends received deduction of 50% on the $17,000 dividend received, which equals $8,500 (50% x $17,000).

Jazz Corporation Owns 50 Percent of the Mitchell Corporation Stock