Orange Corporation owns stock in White Corporation and has net operating income of $800,000 for the year.White Corporation pays Orange a dividend of $300,000.What amount of dividends received deduction may Orange claim if it owns 18% of White stock (assuming Orange's dividends received deduction is not limited by its taxable income)?
A)$0.
B)$210,000.
C)$240,000.
D)$300,000.
E)None of the above.

Question

Quizplus · Accepted Answer

The dividends received deduction depends upon the percentage of ownership by the corporate shareholder.If Orange Corporation owns 18% of White Corporation,Orange would qualify for a 70% deduction,or $210,000 in this case.

Orange Corporation Owns Stock in White Corporation and Has Net