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Unformatted text preview: ived from a "20% owned corporation"; (3) 100% of
qualifying dividends received from members of the same affiliated group to which the recipient
corporation belongs; and (4) 100% of dividends received by a small business investment company.
Choices "b", "c", and "d" are incorrect, per the above rule. CPA-02238 Type1 M/C 117. CPA-02238 A-D Nov 91 II #44 Corr Ans: D PM#23 R 3-99 Page 6 Andi Corp. issued $1,000,000 face amount of bonds in 1985 and established a sinking fund to pay the
debt at maturity. The bondholders appointed an independent trustee to invest the sinking fund
contributions and to administer the trust. In 1990, the sinking fund earned $60,000 in interest on bank
deposits and $8,000 in net long-term capital gains. All of the trust income is accumulated with Andi's
periodic contributions so that the aggregate amount will be sufficient to pay the bonds when they mature.
What amount of trust income was taxable to Andi in 1990?
Choice "d" is correct. $68,000. The full amount of the interest income received...
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