CH2 4 Q s - Chapters 2 4 Study Question EXAMPLE EXAM QUESTIONS_1 Jupiter Corporation received a $100,000 dividend from Pluto Corporation Jupiter

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapters 2 & 4 Study Question EXAMPLE EXAM QUESTIONS ____1. Jupiter Corporation received a $100,000 dividend from Pluto Corporation. Jupiter, which owns 75% of Pluto Corporation, may take a dividends received deduction of $80,000. T The allowable dividends received deduction for a corporation that owns 20% or more but less than 80% of the dividend-paying corporation is 80%. Therefore, Jupiter can take a dividends received deduction of $80,000. 2. Intergalactic Corporation, a personal service corporation, had $50,000 of active income, $90,000 of portfolio income, and a $160,000 passive loss during the year. How much of the passive loss is deductible? a. $0. b. $50,000. c. $90,000. d. $160,000. e. None of the above. a A personal service corporation may not offset passive loss against active income or portfolio income. We didn’t cover this directly in the lecture, but it is a good thing to know that a personal service corporation is treated similar to an individual such that the Company is not allowed to offset passive losses against active income – just like an individual. 3. Gemini Corporation, which owns stock in Pisces Corporation, had net operating income of $200,000 for the year. Pisces pays Gemini a dividend of $80,000. Gemini takes a dividends received deduction of $56,000. Which of the following statements is correct? a. Gemini owns less than 20% of Pisces Corporation. b. Gemini owns 20% or more, but less than 80% of Pisces Corporation. c. Gemini owns 80% of Pisces Corporation. d.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/04/2009 for the course MGMT 133 taught by Professor Armstr during the Spring '09 term at UC Irvine.

Page1 / 3

CH2 4 Q s - Chapters 2 4 Study Question EXAMPLE EXAM QUESTIONS_1 Jupiter Corporation received a $100,000 dividend from Pluto Corporation Jupiter

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online