Ace Corporation Owns All of the Stock of Junior Corporation,a

question 11

Multiple Choice

Ace Corporation owns all of the stock of Junior Corporation,a Delaware passive investment company.Ace operates strictly in nonunitary State B,which levies a 6% income tax.This year,Junior earned $200,000 of portfolio interest income and paid $150,000 of this amount to Ace in the form of a dividend.In which state(s) will the interest income create an income tax liability?

• A)In both B and Delaware, according to the apportionment formulas of each.
• B)Only in Delaware.
• C)Only in B.
• D)In neither state.

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Definitions:

Former Slaves

Individuals who were emancipated from the condition of slavery, particularly following the Civil War in the United States.

Civil War

A conflict between citizens of the same country, often referred to specifically as the American Civil War which was fought from 1861 to 1865 over issues including states' rights and slavery.

Economic Impact

Refers to the effect of an event, policy, or market fluctuation on the economy of a specific area, including changes in employment, income, and overall economic growth.

Social Impact

The effect an organization's actions have on the well-being of the community or society at large, encompassing both positive and negative consequences.