Question

Jazz Corporation owns 50 percent of the Williams Corp. stock. Williams distributed a $26,000 dividend to Jazz Corporation. Jazz Corp.'s taxable income before the dividend was $101,600. What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.

Answer 1

$20800

Step-by-step explanation:

As we know that the company Jazz Incorporation owns 50% of the total shares of William Corporation which is more than 20% and less than 80% of the available stocks.

The company is entitled to 80% dividends received deduction ($26,000 × 80%) which is:

$26000 * 80% = $20800