Parent and Subsidiary Corporations Are Members of an Affiliated Group

question 44

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 $7,500 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 $5,500 from a less-than-20%-owned corporation.The consolidated dividends-received deduction is what?

---

Definitions:

Appropriation

The legislative process of allocating funds to specific governmental purposes, projects, or activities.

Department of Transportation

A federal Cabinet department of the U.S. government concerned with transportation, responsible for highways, railroads, aviation, and maritime shipping.

Spending Bill

Legislation proposed and passed by a legislative body that authorizes government spending on specific programs, services, or activities.

Lawmaking Process

The procedure through which proposals are introduced, studied, and discussed in legislative bodies to become law.