Fallon Inc

question 14

Multiple Choice

Fallon Inc., a U.S. corporation, owns stock in several foreign corporations. This year, Fallon received $420,000 as a dividend from Mars Corporation, and $225,000 as a dividend from Jupiter Inc. Mars is a foreign corporation in which Fallon has owned 8 percent of the outstanding stock for ten years. Jupiter is a foreign corporation in which Fallon has owned 17 percent of the outstanding stock for two years. Compute Fallon's allowable dividends-received deduction for these foreign dividends.

• A) $420,000
• B) $225,000
• C) $665,000
• D) $0

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Definitions:

Accumulated Funds

Total funds or capital that has been gathered or saved up over a period, often referring to the sum of earnings, savings, or investments.

Compounded Monthly

A method where interest is added to the principal amount on a monthly basis, leading to interest earnings on previously earned interest.

Three Payments

A payment plan that divides the total amount owed into three separate payments over a specified period.

Second Payment

The subsequent payment made after the first in a series of payments, often in the context of a financial transaction or loan.