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Unformatted text preview: 0,000 The dividends were declared and received in 1988 from an unrelated taxable domestic corporation in
which Kell owned less than 1% of the investee’s stock. Kell had no portfolio indebtedness. In its 1988
income tax return, Kell should claim a dividends received deduction of:
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Becker CPA Review, PassMaster Questions
Lecture: Regulation 3 CPA-02203
Choice "c" is correct. $2,100.
Dividend received deduction $ 3,000
$ 2,100 The dividends received deduction (DRD) is 70% of dividends received from corporations owned less than
20% by stock and value by the recipient corporation.
Choice "a" is incorrect. Kell is allowed a DRD of 70%.
Choice "b" is incorrect. $100 DRD is not current law.
Choice "d" is incorrect. This choice takes an 80% DRD. Kell must own 20% or more of the payor
corporation to receive an 8...
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