Following the procedure used in example 27 in the

Example 26
54. Following the procedure used in Example 27 in the text, proceed as follows:
Almond Blond Cherry
Corporation Corporation Corporation
Step 1
70% × $100,000 (dividend received) $70,000
70% × $100,000 (dividend received) $70,000
70% × $100,000 (dividend received) $70,000
Step 2
70% × $200,000 (taxable income before DRD) $140,000
70% × $50,000 (taxable income before DRD) $35,000
70% × $90,000 (taxable income before DRD) $63,000
Step 3
Lesser of Step 1 or Step 2 $70,000 $63,000
Generates a net operating loss $70,000
Consequently, the dividends received deduction for Almond Corporation is $70,000
under the general rule. Blond Corporation also claims a dividends received deduction of

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p. 2-21
57. Purple Corporation:
Tax on—$65,000
Tax on $50,000 × 15% $ 7,500
Tax on $15,000 × 25% 3,750
Total tax $ 11,250
Azul Corporation:
Tax on—$290,000
Tax on $100,000 $ 22,250
Tax on $190,000 × 39% 74,100
Total tax $ 96,350
Pink Corporation:
Tax on—$12,350,000
Tax on $10 million $3,400,000
Tax on $2,350,000 × 35% 822,500
Total tax $4,222,500