Copper Corporation, a calendar year C corporation, owns stock in Bronze Corporation and has net operating income of $900,000 for the current year. Bronze Corporation pays Copper a dividend of $150,000. What amount of dividends received deduction may Copper claim if it owns 85% of Bronze stock (assuming Copper's dividends received deduction is not limited by its taxable income)?
A) $75,000
B) $97,500
C) $120,000
D) $150,000
E) None of the above

Question

Quizplus · Accepted Answer

Copper Corporation can claim a dividends received deduction of 100% of the dividend amount because it owns 85% of Bronze Corporation, which qualifies for the 100% deduction under the tax code for ownership of 80% or more.

Copper Corporation, a Calendar Year C Corporation, Owns Stock in Bronze