A parent holding company sells shares in its subsidiary such that the parent now owns only 65% of the subsidiary and, thus, the tax returns of the parent and its subsidiary can't be consolidated. The parent receives annual dividends from the subsidiary of $2.500.000. If the parent's marginal tax rate is 34% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and how much net dividends are received? a)10.29%; $2.245,000 b)10.29%; $2.135,000 c)23.89%; $1.905,000 d)10.29%; $1.750,000 e)34.0%; $1.650,000

A parent holding company sells shares in its subsidiary such that the parent now owns only 65% of the subsidiary and, thus, the tax returns of the parent and its subsidiary can't be consolidated. The parent receives annual dividends from the subsidiary of $2.500.000. If the parent's marginal tax rate is 34% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and how much net dividends are received? a)10.29%; $2.245,000 b)10.29%; $2.135,000 c)23.89%; $1.905,000 d)10.29%; $1.750,000 e)34.0%; $1.650,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Which of the following dividends received by lon Corp. would NOT be subject to Part IV tax? O A. Dividends received from a wholly owned subsidiary of lon Corp. and, as a result of distributing this dividend, the wholly owned subsidiary received a dividend refund of $5,000. O B. Dividends received from lon Corp.'s portfolio of investments that are deductible in the calculation of taxable income for lon Corp. O C. Dividends received from an unconnected company that is deductible in the calculation of taxable income for lon Corp. O D. Dividends received from a wholly owned subsidiary of lon Corp. and the wholly owned subsidiary did not receive a dividend refund in the current year.
Garrison holds a controlling interest in Robertson's outstanding stock. For the current year, the following information has been gathered about these two companies: Garrison Robertson Separate operating income $ 300,000 $ 200,000 (includes $50,000 intra-entity gross profit in ending inventory) Dividends paid 32,000 50,000 Tax rate 21 % 21 % Garrison uses the initial value method to account for the investment in Robertson. Garrison's separate operating income figure does not include dividend income for the current year. Assume that Garrison owns 80 percent of Robertson's voting stock. On a consolidated tax return, what amount of income tax is paid? Assume that Garrison owns 80 percent of Robertson's voting stock. On separate tax returns, what total amount of income tax is paid? Assume that Garrison owns 70 percent of Robertson's voting stock. What total amount of income tax expense does a consolidated income statement…
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B5.
A corporation loses $150,000 from operations. It receives $200,000 in dividend s from a 20%- owned corporation. Required: 1) compute taxable income before deduction for dividend received; 2) compute the full dividend received deduction; 3) compute taxable income after the dividend- received ; 4) compute NOL ( if applicable).
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On January 10, 2010, parents lend 70% of own subsidiary 5 million at 6% annual interest for two years. Subsidiary pays the accrued interest at the end of each year. Answer the following: assume the subsidiary had no other transactions in 2010. How much is non - controlling interest in subsidiary net income Don't use any AI. It's strictly prohibited. Help me asap please thank you
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