Jazz Corporation owns 10% of Williams Corp.stock.Williams distributed a $10,000 dividend to Jazz Corporation.Jazz Corp.'s taxable income (loss)before the dividend was ($2,000).What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.?

Question

Quizplus · Accepted Answer

The dividends received deduction is 50% of the dividend received, which is $5,000. However, since Jazz Corp.'s taxable income before the dividend was ($2,000), the dividends received deduction is limited to $2,000.

Jazz Corporation Owns 10% of Williams Corp