Hippo, Inc

question 18

Multiple Choice

Hippo, Inc., a calendar year C corporation, manufactures golf gloves.For 2012, Hippo had taxable income (before DPAD) of $900,000, qualified domestic production activities income of $750,000, and W-2 wages related to qualified production activities income of $140,000.Hippo's domestic production activities deduction for 2012 is:

• A)$0.
• B)$12,600.
• C)$67,500.
• D)$70,000.
• E)None of the above.

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Definitions:

Consolidation

The joining of two corporations.

Securities

Financial instruments that signify ownership in a public company (stocks), a creditor relationship with a governmental body or a corporation (bonds), or rights to ownership as represented by an option.

Fractional Interest

Ownership in a part or fraction of an asset, where the ownership is shared among multiple parties.

Debt Instruments

Financial vehicles representing a promise to pay back borrowed funds, including bonds, notes, and debentures.