Answer:
correct option is c. $350,000
Explanation:
given data
book income = $400,000
dividends = $100,000
owned domestic corporation = 15%
to find out
Karas Corporation's taxable income for the current year
solution
we know here that Karas Corporation qualifies report that dividends received deduction = 50 % of dividends from the taxable unaffiliated domestic corporation
so we here assumed that if paying corporation is unaffiliated
then receiving corporation owns less than = 20 %
so book net income before federal income tax = $400,000
and Dividends received deduction = 0.50 × $100,000 = $50,000
Taxable income will be = book net income before federal income tax - Dividends received deduction .................1
put here value
Taxable income = $400,000 - $50000
Taxable income = $350,000
so correct option is c. $350,000
