Jazz Corporation owns 50% of the Williams Corp. Stock. Williams distributed a $1

Question

Jazz Corporation owns 50% of the Williams Corp. Stock. Williams distributed a $10,000 dividend to jazz Corporation. Jazz Corp’s modified taxable income (MTI) for the purposes of the Dividends Received Deduction was $10,000. What is the amount of Jazz dividends received deduction on the dividend it received from Williams Corp?

Jazz Corporation owns 10% of the Williams Corp. Stock. Williams distributed a $10,000 dividend to jazz Corporation. Jazz Corp’s modified taxable income (MTI) for the purposes of the Dividends Received Deduction was $8,000. What is the amount of Jazz dividends received deduction on the dividend it received from Williams Corp?

Jazz Corporation owns 10% of the Williams Corp. Stock. Williams distributed a $10,000 dividend to jazz Corporation. Jazz Corp’s modified taxable income (MTI) for the purposes of the Dividends Received Deduction was $4,000. What is the amount of Jazz dividends received deduction on the dividend it received from Williams Corp?

Explanation / Answer

In the question it is given that Jazz Corporatiom owns 50 % of the Willams Corp. Stock which is in excess of 20 % Jazz corporation will be entitled to dividend deduction but since he doesnt hold 80 % of the stock hence Jazz Corporation will be eligible for 80 % deduction on dividend received.Hence Jazz Corporation will be eligible for 80 % on $ 10,000 In the given question Jazz Corporation owns 10 % of the Willam Corp stock it will be eligible for 70 % deduction in the dividend received.Hence Jazz Corp. will be eligible for 70 % deduction on $ 8000 Here also Jazz Corporation holds only 10 % of the Willam Corp stock,Hence it will be eligible for 70 % deduction in the dividend received.Jazz Corporation can claim 70% on $ 4000 as its dividends received deduction

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