P is a publicly held corporation with a subsidiary S of which P has always owned

Question

P is a publicly held corporation with a subsidiary S of which P has always owned 100% of the outstanding stock. P has taxable income of $1,000,000 and S has taxable income of $100,000. S distributed a dividend of $50,000 from its taxable of $100,000 so that P has potential additional taxable income of $50,000 and add that P has not owned S always. a. P's taxable income increases by $10,000 because of the 80% DRD b. P has no additional AMT exposure because 80% DRD's are not AMD ACE adjustment c. P's corporate income tax is $343,400 d. All of the above

Explanation / Answer

b. P has no additional AMT exposure because 80% DRD's are not AMD ACE adjustment

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