Dividends Received Deductions - CPA Regulation (REG)
Card 1 of 24
The corporate dividends-received deduction:
The corporate dividends-received deduction:
Tap to reveal answer
The dividends-received deduction (DRD) depends on the percentage of the investor’s share of the investee. To take advantage of the DRD, investors must hold the investee’s stock for a specific period prior to the ex-dividend date. The DRD is only available to domestic C corporations, and is limited to the investor’s taxable income for the period.
The dividends-received deduction (DRD) depends on the percentage of the investor’s share of the investee. To take advantage of the DRD, investors must hold the investee’s stock for a specific period prior to the ex-dividend date. The DRD is only available to domestic C corporations, and is limited to the investor’s taxable income for the period.
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Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?
Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?
Tap to reveal answer
For the dividends-received deduction (DRD), less than 20% ownership results in a 50% deduction, so Rohr gets a DRD of $1,500 (50% of the $3,000 dividend received).
For the dividends-received deduction (DRD), less than 20% ownership results in a 50% deduction, so Rohr gets a DRD of $1,500 (50% of the $3,000 dividend received).
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In Year 2, Buy Corp., an accrual basis calendar year C corporation, received $100,000 in dividend income from the common stock that it held in an unrelated domestic corporation. The stock was not debt financed and was held for over a year. Buy recorded the following information for Year 2:
- Loss from Buy’s operations: (10,000)
- Dividends received: 100,000
- Taxable income (before dividends-received deduction): 90,000
Buy’s dividends-received deduction on its Year 2 tax return was:
In Year 2, Buy Corp., an accrual basis calendar year C corporation, received $100,000 in dividend income from the common stock that it held in an unrelated domestic corporation. The stock was not debt financed and was held for over a year. Buy recorded the following information for Year 2:
- Loss from Buy’s operations: (10,000)
- Dividends received: 100,000
- Taxable income (before dividends-received deduction): 90,000
Buy’s dividends-received deduction on its Year 2 tax return was:
Tap to reveal answer
Generally, the minimum dividends-received deduction (DRD) is 50%, which would mean in this case a $100,000 would result in a $50,000 DRD. However, the DRD is limited to the lesser of the DRD % applied to dividends received or the DRD % applied to taxable income without consideration of the DRD. Since we are told the taxable income is $90,000, the maximum DRD at 50% would be $45,000. (Had the company been eligible for a 65% DRD, the DRD could only have been $58,500, which was not an option.)
Generally, the minimum dividends-received deduction (DRD) is 50%, which would mean in this case a $100,000 would result in a $50,000 DRD. However, the DRD is limited to the lesser of the DRD % applied to dividends received or the DRD % applied to taxable income without consideration of the DRD. Since we are told the taxable income is $90,000, the maximum DRD at 50% would be $45,000. (Had the company been eligible for a 65% DRD, the DRD could only have been $58,500, which was not an option.)
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The corporate dividends received deduction:
The corporate dividends received deduction:
Tap to reveal answer
The corporate DRD is affected by a requirement that the investor corporation must own the investee’s stock for a specified minimum holding period of more than 45 days.
The corporate DRD is affected by a requirement that the investor corporation must own the investee’s stock for a specified minimum holding period of more than 45 days.
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Canada Co, a C Corp, owns 15% of Apple Corp. Apple paid a $3,000 cash dividend to Canada. What is Canada’s DRD?
Canada Co, a C Corp, owns 15% of Apple Corp. Apple paid a $3,000 cash dividend to Canada. What is Canada’s DRD?
Tap to reveal answer
Per the DRD rates, with a 15% ownership in Apple, the percentage used for the deduction is 50%. 50% * $3,000 = $1,500.
Per the DRD rates, with a 15% ownership in Apple, the percentage used for the deduction is 50%. 50% * $3,000 = $1,500.
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The Dividends Received Deduction applies to:
The Dividends Received Deduction applies to:
Tap to reveal answer
Of the following choices, only a C Corporation in the United States would be applicable for the DRD under current US tax law.
Of the following choices, only a C Corporation in the United States would be applicable for the DRD under current US tax law.
← Didn't Know|Knew It →
The corporate dividends received deduction:
The corporate dividends received deduction:
Tap to reveal answer
The corporate DRD is affected by a requirement that the investor corporation must own the investee’s stock for a specified minimum holding period of more than 45 days.
The corporate DRD is affected by a requirement that the investor corporation must own the investee’s stock for a specified minimum holding period of more than 45 days.
← Didn't Know|Knew It →
Canada Co, a C Corp, owns 15% of Apple Corp. Apple paid a $3,000 cash dividend to Canada. What is Canada’s DRD?
Canada Co, a C Corp, owns 15% of Apple Corp. Apple paid a $3,000 cash dividend to Canada. What is Canada’s DRD?
Tap to reveal answer
Per the DRD rates, with a 15% ownership in Apple, the percentage used for the deduction is 50%. 50% * $3,000 = $1,500.
Per the DRD rates, with a 15% ownership in Apple, the percentage used for the deduction is 50%. 50% * $3,000 = $1,500.
← Didn't Know|Knew It →
The Dividends Received Deduction applies to:
The Dividends Received Deduction applies to:
Tap to reveal answer
Of the following choices, only a C Corporation in the United States would be applicable for the DRD under current US tax law.
Of the following choices, only a C Corporation in the United States would be applicable for the DRD under current US tax law.
← Didn't Know|Knew It →
The corporate dividends-received deduction:
The corporate dividends-received deduction:
Tap to reveal answer
The dividends-received deduction (DRD) depends on the percentage of the investor’s share of the investee. To take advantage of the DRD, investors must hold the investee’s stock for a specific period prior to the ex-dividend date. The DRD is only available to domestic C corporations, and is limited to the investor’s taxable income for the period.
The dividends-received deduction (DRD) depends on the percentage of the investor’s share of the investee. To take advantage of the DRD, investors must hold the investee’s stock for a specific period prior to the ex-dividend date. The DRD is only available to domestic C corporations, and is limited to the investor’s taxable income for the period.
← Didn't Know|Knew It →
Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?
Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?
Tap to reveal answer
For the dividends-received deduction (DRD), less than 20% ownership results in a 50% deduction, so Rohr gets a DRD of $1,500 (50% of the $3,000 dividend received).
For the dividends-received deduction (DRD), less than 20% ownership results in a 50% deduction, so Rohr gets a DRD of $1,500 (50% of the $3,000 dividend received).
← Didn't Know|Knew It →
In Year 2, Buy Corp., an accrual basis calendar year C corporation, received $100,000 in dividend income from the common stock that it held in an unrelated domestic corporation. The stock was not debt financed and was held for over a year. Buy recorded the following information for Year 2:
- Loss from Buy’s operations: (10,000)
- Dividends received: 100,000
- Taxable income (before dividends-received deduction): 90,000
Buy’s dividends-received deduction on its Year 2 tax return was:
In Year 2, Buy Corp., an accrual basis calendar year C corporation, received $100,000 in dividend income from the common stock that it held in an unrelated domestic corporation. The stock was not debt financed and was held for over a year. Buy recorded the following information for Year 2:
- Loss from Buy’s operations: (10,000)
- Dividends received: 100,000
- Taxable income (before dividends-received deduction): 90,000
Buy’s dividends-received deduction on its Year 2 tax return was:
Tap to reveal answer
Generally, the minimum dividends-received deduction (DRD) is 50%, which would mean in this case a $100,000 would result in a $50,000 DRD. However, the DRD is limited to the lesser of the DRD % applied to dividends received or the DRD % applied to taxable income without consideration of the DRD. Since we are told the taxable income is $90,000, the maximum DRD at 50% would be $45,000. (Had the company been eligible for a 65% DRD, the DRD could only have been $58,500, which was not an option.)
Generally, the minimum dividends-received deduction (DRD) is 50%, which would mean in this case a $100,000 would result in a $50,000 DRD. However, the DRD is limited to the lesser of the DRD % applied to dividends received or the DRD % applied to taxable income without consideration of the DRD. Since we are told the taxable income is $90,000, the maximum DRD at 50% would be $45,000. (Had the company been eligible for a 65% DRD, the DRD could only have been $58,500, which was not an option.)
← Didn't Know|Knew It →
The corporate dividends-received deduction:
The corporate dividends-received deduction:
Tap to reveal answer
The dividends-received deduction (DRD) depends on the percentage of the investor’s share of the investee. To take advantage of the DRD, investors must hold the investee’s stock for a specific period prior to the ex-dividend date. The DRD is only available to domestic C corporations, and is limited to the investor’s taxable income for the period.
The dividends-received deduction (DRD) depends on the percentage of the investor’s share of the investee. To take advantage of the DRD, investors must hold the investee’s stock for a specific period prior to the ex-dividend date. The DRD is only available to domestic C corporations, and is limited to the investor’s taxable income for the period.
← Didn't Know|Knew It →
Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?
Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?
Tap to reveal answer
For the dividends-received deduction (DRD), less than 20% ownership results in a 50% deduction, so Rohr gets a DRD of $1,500 (50% of the $3,000 dividend received).
For the dividends-received deduction (DRD), less than 20% ownership results in a 50% deduction, so Rohr gets a DRD of $1,500 (50% of the $3,000 dividend received).
← Didn't Know|Knew It →
In Year 2, Buy Corp., an accrual basis calendar year C corporation, received $100,000 in dividend income from the common stock that it held in an unrelated domestic corporation. The stock was not debt financed and was held for over a year. Buy recorded the following information for Year 2:
- Loss from Buy’s operations: (10,000)
- Dividends received: 100,000
- Taxable income (before dividends-received deduction): 90,000
Buy’s dividends-received deduction on its Year 2 tax return was:
In Year 2, Buy Corp., an accrual basis calendar year C corporation, received $100,000 in dividend income from the common stock that it held in an unrelated domestic corporation. The stock was not debt financed and was held for over a year. Buy recorded the following information for Year 2:
- Loss from Buy’s operations: (10,000)
- Dividends received: 100,000
- Taxable income (before dividends-received deduction): 90,000
Buy’s dividends-received deduction on its Year 2 tax return was:
Tap to reveal answer
Generally, the minimum dividends-received deduction (DRD) is 50%, which would mean in this case a $100,000 would result in a $50,000 DRD. However, the DRD is limited to the lesser of the DRD % applied to dividends received or the DRD % applied to taxable income without consideration of the DRD. Since we are told the taxable income is $90,000, the maximum DRD at 50% would be $45,000. (Had the company been eligible for a 65% DRD, the DRD could only have been $58,500, which was not an option.)
Generally, the minimum dividends-received deduction (DRD) is 50%, which would mean in this case a $100,000 would result in a $50,000 DRD. However, the DRD is limited to the lesser of the DRD % applied to dividends received or the DRD % applied to taxable income without consideration of the DRD. Since we are told the taxable income is $90,000, the maximum DRD at 50% would be $45,000. (Had the company been eligible for a 65% DRD, the DRD could only have been $58,500, which was not an option.)
← Didn't Know|Knew It →
The corporate dividends received deduction:
The corporate dividends received deduction:
Tap to reveal answer
The corporate DRD is affected by a requirement that the investor corporation must own the investee’s stock for a specified minimum holding period of more than 45 days.
The corporate DRD is affected by a requirement that the investor corporation must own the investee’s stock for a specified minimum holding period of more than 45 days.
← Didn't Know|Knew It →
Canada Co, a C Corp, owns 15% of Apple Corp. Apple paid a $3,000 cash dividend to Canada. What is Canada’s DRD?
Canada Co, a C Corp, owns 15% of Apple Corp. Apple paid a $3,000 cash dividend to Canada. What is Canada’s DRD?
Tap to reveal answer
Per the DRD rates, with a 15% ownership in Apple, the percentage used for the deduction is 50%. 50% * $3,000 = $1,500.
Per the DRD rates, with a 15% ownership in Apple, the percentage used for the deduction is 50%. 50% * $3,000 = $1,500.
← Didn't Know|Knew It →
The Dividends Received Deduction applies to:
The Dividends Received Deduction applies to:
Tap to reveal answer
Of the following choices, only a C Corporation in the United States would be applicable for the DRD under current US tax law.
Of the following choices, only a C Corporation in the United States would be applicable for the DRD under current US tax law.
← Didn't Know|Knew It →
The corporate dividends-received deduction:
The corporate dividends-received deduction:
Tap to reveal answer
The dividends-received deduction (DRD) depends on the percentage of the investor’s share of the investee. To take advantage of the DRD, investors must hold the investee’s stock for a specific period prior to the ex-dividend date. The DRD is only available to domestic C corporations, and is limited to the investor’s taxable income for the period.
The dividends-received deduction (DRD) depends on the percentage of the investor’s share of the investee. To take advantage of the DRD, investors must hold the investee’s stock for a specific period prior to the ex-dividend date. The DRD is only available to domestic C corporations, and is limited to the investor’s taxable income for the period.
← Didn't Know|Knew It →
Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?
Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?
Tap to reveal answer
For the dividends-received deduction (DRD), less than 20% ownership results in a 50% deduction, so Rohr gets a DRD of $1,500 (50% of the $3,000 dividend received).
For the dividends-received deduction (DRD), less than 20% ownership results in a 50% deduction, so Rohr gets a DRD of $1,500 (50% of the $3,000 dividend received).
← Didn't Know|Knew It →