PQR Corporation has taxable income before DRD of $60,000 that includes a dividend of $10,000 from a large publicly-traded domestic corporation.What is the tax liability of PQR Corporation?

Question

Quizplus · Accepted Answer

PQR Corporation is eligible for a domestic dividend received deduction (DRD) of 50% on the $10,000 dividend, resulting in a DRD of $5,000. Therefore, the taxable income after DRD is $55,000. 
The tax liability for PQR Corporation can be calculated as follows:
- On the first $50,000 of taxable income: $7,500 (tax rate of 15%)
- On the remaining $5,000 of taxable income: $750 (tax rate of 15%)
Thus, the total tax liability is $8,250. 
Therefore, the answer is C.

PQR Corporation Has Taxable Income Before DRD of $60,000 That