Question

Riverbend Inc. received a $267,500 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $2,440,000 before deducting the dividends received deduction (DRD), a $27,750 domestic production activities deduction, and a $137,000 charitable contribution. (Use Corporate Tax Rate Table.) (Leave no answer blank. Enter zero if applicable. Round Marginal tax rate to 1 decimal place.)

a. What is Riverbend’s deductible DRD assuming it owns 16 percent of Hobble Corporation?

b. Assuming the facts in part (a), what is Riverbend’s marginal tax rate on the dividend?

c. What is Riverbend’s DRD assuming it owns 40 percent of Hobble Corporation?

d. Assuming the facts in part (c), what is Riverbend’s marginal tax rate on the dividend?

. What is Riverbend’s DRD assuming it owns 92 percent of Hobble Corporation (and is part of the same affiliated group)?
f. Assuming the facts in part (e), what is Riverbend’s marginal tax rate on the dividend?

Answer 1