Parent and Subsidiary Corporations Are Members of an Affiliated Group

question 20

Essay

Parent and Subsidiary Corporations are members of an affiliated group. Their separate taxable incomes (before taking into account any dividends)are $75,000 and $85,000, respectively. Subsidiary Corporation receives a dividend from a less-than-20%-owned corporation of $8,000 and from an affiliated 100%-owned nonconsolidated insurance subsidiary of $40,000. Subsidiary distributes a dividend of $35,000 to Parent Corporation who also receives dividends of $6,000 from a less-than-20%-owned corporation. The consolidated dividends-received deduction is what?

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Definitions:

Income Differences

The disparities or variations in earnings and wealth among individuals or groups within a society.

Taste-for-Discrimination Model

An economic theory that explains how personal bias can lead to discrimination in hiring and wage decisions.

Discrimination Coefficient

A statistical measure used to analyze the degree of differentiation between variables or groups.

Market Wage Rate

The prevailing rate of pay for a particular job in the competitive labor market.