Compute the dividends received deduction

Reference no: EM133541805

Question 1.) Crane and Loon Corporations, two unrelated calendar year C corporations, have the following transactions for the current year.
Crane,Loon
Gross Income: 180k, 300k
Expenses from operations: 100k, 230k
Div received: 100k, 230k
Compute the DRD for both companies

a. Compute the dividends received deduction for Crane Corporation.

b. Compute the dividends received deduction for Loon Corporation.

The DRD table is below:

Percentage of Ownership by Corporate Shareholder Deduction Percentage Less than 20%: 50%

20% or more (but less than 80%) :65%

80% or more* :100%

Question 2.)Cherry Corporation, a calendar year C corporation, is formed and begins business on 10/1/2023. In connection with its formation, Cherry incurs organizational expenditures of $54,200.

Round the per month amount to two decimal places. Round your final answer to the nearest dollar.

Determine Cherry Corporation's deduction for organizational expenditures for the current year.

Question 3.)Crockett Corporation, a calendar year C corporation, reports net income of $2,000,000,000 on its 2023 audited financial statements (including financial statement depreciation of $250,000,000). Also, for 2023, Crockett reports taxable income of $900,000,000 (including tax depreciation of $400,000,000). Assume that Crockett 's average annual AFSI for the three-year period ending December 31, 2023, is in excess of $1,000,000,000. Also assume that Crockett has no AMT foreign tax credit for 2023.

Reference no: EM133541805

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