Orange Corporation Owns Stock in White Corporation and Has Net

question 31

Multiple Choice

Orange Corporation owns stock in White Corporation and has net operating income of $400,000 for the year.White Corporation pays Orange a dividend of $60,000.What amount of dividends received deduction may Orange claim if it owns 45% of White stock (assuming Orange's dividends received deduction is not limited by its taxable income) ?

• A)$27,000
• B)$42,000
• C)$48,000
• D)$60,000
• E)None of the above

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Definitions:

Business Unit

A segment of a company with its distinct operations and management, often treated as an individual entity within the larger corporation for strategic and operational planning.

Avoidable

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A document that compares actual results to planned or expected results in areas such as budgeting, operations, and project management.

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The process of increasing the efficiency, effectiveness, or profitability of an operation, system, or organization.