Question

AKG Corporation has an ownership stake in four other companies. Which of the following deduction amounts...

AKG Corporation has an ownership stake in four other companies. Which of the following deduction amounts is correct? AKG owns 15% of JTD Company and received $20,000 dividends. The Schedule C (Form 1120) deduction is $3,000. AKG owns 50% of NDB Company, and received $15,000 dividends. The Schedule C (Form 1120) deduction is $9,750. AKG owns 75% of RWB Company, and received $20,000 dividends. The Schedule C (Form 1120) deduction is $12,500. AKG owns 90% of RAK Company, and received $35,000 dividends. The Schedule C (Form 1120) deduction is $28,000..

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Answer #1
Corporation Dividend received % of stock held Deduction % Deductions as per question Actual deduction allowable
JTD 20000 15% 50% 3000 10000
NDB 15000 50% 65% 9750 9750
RWB 20000 75% 65% 12500 13000
RAK 35000 90% 65% 28000 22750

Note: Actual deduction allowable = Dividend received * deduction %

Deduction in case of NDB is correct

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