Riverbend Incorporated received a $220,000 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $3,020,000 before deducting the dividends-received deduction (DRD), a $53,500 NOL carryover, and a $189,000 charitable contribution. Use Exhibit 16-6. (Round your tax rates to 1 decimal place. Leave no answer blank. Enter zero if applicable.) Problem 16-54 Part c (Algo) c. What is Riverbend's DRD assuming it owns 48 percent of Hobble Corporation?

Riverbend Incorporated received a $220,000 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $3,020,000 before deducting the dividends-received deduction (DRD), a $53,500 NOL carryover, and a $189,000 charitable contribution. Use Exhibit 16-6. (Round your tax rates to 1 decimal place. Leave no answer blank. Enter zero if applicable.) Problem 16-54 Part c (Algo) c. What is Riverbend's DRD assuming it owns 48 percent of Hobble Corporation?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 20P

See similar textbooks

Similar questions

Haze Corporation, a calendar year C corporation, owns stock in Lava Corporation and has taxable income of $127,000 for the year before considering the dividends received deduction. In the current year, Lava Corporation pays Haze Corp a dividend of $172,000, which was considered in calculating the $127,000. What amount of dividends received deduction may Haze claim if it owns 15% of Lava's stock? A. $0 B. $111,800 C. $86,000 D. $63,500
Due to COVID-19 impact, Watson Co becomes insolvent and placed into voluntary liquidation by itsdirectors. Dissolve liquidators have been appointed as the company liquidators. On the winding up ofthe Watson Co, Dissolve liquidators have started distributions and Paul as ex-shareholder of WatsonCo received $7,200 from the liquidators, which was inclusive of $3,000 unfranked dividend pursuantto the provision of Income Tax Assessment Act 1963, section 47(1). This distribution to Paul was fromhis $4,000 investment in the shares of Watson Co on 2nd February 2019.Required:With reference to relevant provisions of ITAA 97 and ITAA 36, critically analyze the tax consequencesof the above scenario for Paul. ( maximum 300 words).
Wickum Corporation reports under IFRS (according to IAS No. 39), and recognized a $500,000 other-thantemporary impairment of an HTM debt investment in Right Corporation. Subsequently, the fair value of Wickum’s investment in Right increased by $300,000. How would Wickum account for that increase in fair value?
Which of the following statements is incorrect with respect to the treatment of a net operating loss arising in 2022? a.Unlike individuals, corporations do not adjust their NOLs for net capital losses or nonbusiness deductions. b.The deduction for any carryover year of the NOL is limited to 80% of taxable income (determined without regard to the NOL deduction). c.A corporation may claim a dividends received deduction in computing an NOL. d.An NOL is generally carried back 2 years and forward 20 years.
1 On January 2, 2021, Normal Inc. acquired 15% interest in Laco Co. by paying P1,500,000 for 7,500 ordinary shares. On this date, the net assets of Laco Co. totaled P9 million. The investment was classified as a financial asset at fair value through other comprehensive income. The fair values of Laco Co.’s identifiable assets and liabilities approximate their book values. On August 1, 2021, Normal received dividends of P4 per share from Laco Co. Fair value of the stocks on December 31, 2021 was P190. Net income reported by Laco for the year ended amounted to P1,500,000. On July 1, 2022, Normal Inc. paid P1 million to purchase 5,000 additional shares of Laco Co. from another shareholder. On this date the fair value of the net assets exceeds carrying value by P500,000 attributable to depreciable asset with estimated remaining life of 5 years. On February 1, 2022, cash dividends of P5 were received while dividends of P6 were received on August 1, 2022. Net income reported for the year…
1 On January 2, 2021, Normal Inc. acquired 15% interest in Laco Co. by paying P1,500,000 for 7,500 ordinary shares. On this date, the net assets of Laco Co. totaled P9 million. The investment was classified as a financial asset at fair value through other comprehensive income. The fair values of Laco Co.’s identifiable assets and liabilities approximate their book values. On August 1, 2021, Normal received dividends of P4 per share from Laco Co. Fair value of the stocks on December 31, 2021 was P190. Net income reported by Laco for the year ended amounted to P1,500,000. On July 1, 2022, Normal Inc. paid P1 million to purchase 5,000 additional shares of Laco Co. from another shareholder. On this date the fair value of the net assets exceeds carrying value by P500,000 attributable to depreciable asset with estimated remaining life of 5 years. On February 1, 2022, cash dividends of P5 were received while dividends of P6 were received on August 1, 2022. Net income reported for the year…
Since its incorporation in 2010, Park Inc. has qualifed as a CCPC. During the period since incor-poration until December 31, 2021, the company has had the following transactions that might involve the capital dividend account: 1. In 2012, the company sold depreciable property with an ACB of $225,000. It was the last property in its class and the balance in the class at the time of the sale was $129,600. The proceeds from the sale were $275,000. No additional property was purchased in 2012. 2. In 2014, the company received a capital dividend of $46,000. 3. In 2015, the company received life insurance proceeds, net of the adjusted cost basis of the policy, in the amount of $27,500. 4. In 2016, the company paid a capital dividend of $38,000 and eligible dividends of $19,000. The required election and designation was made. 5. In 2016, the company sold a parcel of land for $100,000. The ACB of this land was $145,000. 6. In January 2021, Park acquired all of the shares of a small…
Wickum Corporation reports under IFRS, and recognized a $500,000 other-than-temporary impairment of anHTM debt investment in Right Corporation. Subsequently, the fair value of Wickum’s investment in Rightincreased by $300,000. How would Wickum account for that increase in fair value?
2. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. O n July 1, 2022, half of the securities are sold for P1,400,000. On December 31, 20x2, how much shall be shown in the statement of comprehensive income as unrealized gain/ loss? (sample answer: 10,500 UG or 10,500 UL)
On January 1, 2020, the Evergreen Corporation purchased marketable equity securities for P2,000,000. The company also paid commission, taxes and other transaction costs amounting to P50,000. Because the securities were acquired not for immediate trading, Evergreen exercise its option to take the change in fair values through other comprehensive income. The securities had the following fair values at December 31, 2020 and 2021, respectively; P1,750,000 and P2,100,000. No securities were sold during 2020 and 2021. What amount of unrealized gain or loss should be reported in the December 31, 2021 statement of financial position as a component of shareholder’s equity.