In the Current Year, Crimson, Inc

question 16

Multiple Choice

In the current year, Crimson, Inc., a calendar C corporation, has income from operations of $180,000 and operating deductions of $225,000. Crimson also had $30,000 of dividends from a 15% stock ownership in a domestic corporation. Which of the following statements is correct with respect to Crimson for the current year?

• A) Crimson's NOL is $15,000.
• B) A dividends received deduction is not allowed in computing Crimson's NOL.
• C) The NOL is carried back 3 years and forward 10 years by Crimson.
• D) Crimson's dividends received deduction is $15,000.
• E) None of the above.

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Definitions:

Profitability

Refers to a company's ability to generate earnings over its costs and expenses.

Controllable Margin

Controllable margin refers to the amount of profit or income that can be directly influenced by the management's decisions, usually excluding fixed costs and overhead.

Operating Assets

Assets that are used for day-to-day functioning of a business and generating revenue, such as inventory, machinery, and buildings.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as the ratio of net profit to the initial cost of the investment.