Question

Crane and Loon corporations, two unrelated C corporations, have the following transactions for the current year....

Crane and Loon corporations, two unrelated C corporations, have the following transactions for the current year.

Crane Loon
Gross income from operations $283,500 $453,600
Expenses from operations 396,900 476,280
Dividends received from domestic corporations (15% ownership) 170,100 340,200

Click here to access the dividends received deduction table.

a. Compute the dividends received deduction for Crane Corporation.
$........................

b. Compute the dividends received deduction for Loon Corporation.
$........................

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Answer #1
Answer
Explanation :
a) Crane Corporation :
Dividend less than 15% take 50%
= $170,100 * 50%
= $85,050
= $283,500 - $396,900 + $170,100
= $56,700
= $56,700 - $170,100*50% = $-28,350
So, Dividend received deduction for crane corporation is $85,050
b) Loon Corporation :
$317,520*50% = $158,520
= $453,600 - $476,280 + $340,200
= $317,520
So, Dividend received deduction for Loon corporation is $158,520
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