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Kaspar and Ludger, two unrelated calendar year corporations, have the following transactions for 2019: Kaspar Corporation...

Kaspar and Ludger, two unrelated calendar year corporations, have the following transactions for 2019: Kaspar Corporation Ludger Corporation Gross income from operations $180,000 $300,000 Expenses from operations $255,000 $310,000 Dividends received from domestic corporations (15% ownership) $100,000 $230,000 Taxable income before the dividends received deduction $25,000 $220,000

Determine the dividends received deduction for both companies.

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Answer #1

ANSWER

The percentage of ownership in case of both the companies is less than 20%.

Therefore, both the companies will get a 50% deduction of the dividends received.

Calculate the dividends received deduction for both companies

Kaspar = $100,000 x 50% = $50,000

Ludger = $230,000 x 50% = $115,000

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