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Unformatted text preview: he dividend is eliminated when a consolidated return is filed. Choice "c" is incorrect. This answer is 30% of the $20,000 dividend. 100% is eliminated upon consolidation. This answer assumes Tech is entitled to a 70% dividends received deduction. CPA-02128 Type1 M/C A-D 45. CPA-02128 ARE May 94 #24 Corr Ans: B PM#61 R 3-01 Page 22 Kisco Corp.'s taxable income for 1993 before taking the dividends received deduction was $70,000. This includes $10,000 in dividends from an unrelated taxable domestic corporation. Given the following tax rates, what would Kisco's income tax be before any credits? Tax rate 15% 25% Partial rate table Up to $50,000 Over $50,000 but not over $75,000 a. $10,000 b. $10,750 c. $12,500 d. $15,750 CPA-02128 Explanation Choice "b" is correct. The $10,000 dividend is from an unrelated corporation. This means less than 20% of the company is owned. A 70% dividends received deduction is available. Taxable income Less: Dividends received deduction (70% ...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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