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PolarNik [594]
3 years ago
5

The Bay Fig Corporation has $350,000 of taxable income from operations for the current year, and dividends of $50,000 received f

rom 10-percent-owned domestic corporations. How much is the Bay Fig Corporation's dividends received deduction for the current year
Business
1 answer:
Natali5045456 [20]3 years ago
3 0

Answer: $25,000

Explanation:

When a company owns less than 20% of another company and receives dividends from that company, they are allowed to deduct 50% of that dividend for tax purposes.

Bay Fig owns 10%(less than 20%) of the domestic corporations so qualifies for the 50% reduction:

= Dividends * 50%

= 50,000 * 50%

= $25,000

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