Provo Corporation, a U

question 68

Multiple Choice

Provo Corporation, a U.S. corporation, received a dividend of $350,000 from its 100 percent owned German subsidiary. A withholding taxof $35,000 was imposed on the dividend. The dividend qualifies for the 100 percent dividends received deduction. What are the U.S. tax consequences to Provo on receipt of the dividend, assuming the foreign tax credit limitation is not binding and the company breaks even on its U.S. operations?

• A)Taxable income of $350,000, net U.S. tax liability of $0, and $14,000 FTC carryforward
• B)Taxable income of $350,000, net U.S. tax liability of $20,000, and $0 FTC carryforward
• C)Taxable income of $0 and $35,000 FTC carryforward
• D)Taxable income of $0 and $0 FTC carryforward

---

Definitions:

Brainstem

The part of the brain connecting the spinal cord with the forebrain and cerebrum, responsible for controlling several basic life functions.

Dorsal Raphe Nucleus

A nucleus located in the brainstem involved in the release of serotonin and implicated in the regulation of mood, sleep, and anxiety.

Learned Helplessness

An instance where a person is overwhelmed by feelings of helplessness, caused by either a distressing event or continual lack of success.

Contingency Blocking

A phenomenon in classical conditioning where a previously learned association prevents the learning of a new association.