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Dividend income from a 30% owned domestic corporation
Operating expenses $600,000
400,000 What is Beta's taxable income for the year?
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Becker CPA Review, PassMaster Questions
Lecture: Regulation 3 c. $230,000
Choice "b" is correct. Corporate taxable income is calculated as follows for a corporation:
Dividends received deduction
Taxable income $600,000
(80,000) [80% DRD]
$220,000 ** Note that the "gross income" amount for the calculation of taxable income should include dividend
income; however, it does not appear that the $100,000 of dividends is included in the $600,000 gross
income amount given. If it were, the answer options would be $100,000 less than they are.
Choice "a" is incorrect. The dividends received deduction allows for a special deduction of 80% of the
dividends received from a 20% to <80% owned domestic corporation, not 100% of the dividends received
(which applies only to ownership of...
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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.
- Fall '10
- The Land