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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: a. b. c. d. $0 $100 $2,100 $2,400 49 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 CPA-02203 Explanation Choice "c" is correct. $2,100. Dividends received Applicable percentage Dividend received deduction $ 3,000 70% $ 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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