Jazz Corporation owns 50% of the Williams Corp.stock.Williams distributed a $10,000 dividend to Jazz Corporation.Jazz Corp.'s taxable income before the dividend was $100,000.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 for a corporation that owns between 20% and 80% of another corporation's stock is 80% of the dividend received. Therefore, Jazz Corporation's dividends received deduction on the $10,000 dividend it received from Williams Corp. would be $8,000 (80% of $10,000).

Jazz Corporation Owns 50% of the Williams Corp