A b c d interest incurred on loan to carry us

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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? a. b. c. d. $0 $8,000 $60,000 $68,000 CPA-02238 Explanation Choice "d" is correct. $68,000. The full amount of the interest income received...
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