Assume Corporation A owns 51% of Corporation B. If Corporation A received $1,000,000 in dividends from Corporation B, how much would be taxable to Corporation A?

Question

Quizplus · Accepted Answer

Corporation A owns more than 20% of Corporation B, so it qualifies for the dividends received deduction (DRD). The DRD allows Corporation A to exclude 80% of the dividends received from taxation, meaning only 20% of $1,000,000, which is $200,000, would be taxable.

Assume Corporation a Owns 51% of Corporation B