Examlex

Solved

Parent Corporation Owns All of the Stock of Junior Corporation

question 161

Multiple Choice

Parent Corporation owns all of the stock of Junior Corporation, a Delaware passive investment company. Parent operates strictly in nonunitary State B, which levies a 9% income tax. This year, Junior earned $200,000 of portfolio interest income and paid a $150,000 dividend to Parent. In which state(s) will the interest income create an income tax liability?


Definitions:

Gross Domestic Product

The aggregate economic or market value of all products and services that have been completed inside a country's boundaries during a specific timeframe.

Interest Rate

The amount charged, expressed as a percentage, by a lender to a borrower for the use of assets over a specific period of time.

Investment

The allocation of resources, usually financial, in expectation of generating an income or profit in the future.

Money Supply

The overall financial resources quantity in an economy at a specified time.

Related Questions