2. For the current year, The Echo Company possessed the following income: / textup{Profit from operations}=/$110/textup{,}000 / textup{Dividends from 20/%-owned taxable domestic operation}=/$1/textup{,}100 In the Echo Company's current year taxable income, how much should be included for dividends received?

Question

William Figueroa

Business

10 February, 16:05

2. For the current year, The Echo Company possessed the following income: / textup{Profit from operations}=/$110/textup{,}000 / textup{Dividends from 20/%-owned taxable domestic operation}=/$1/textup{,}100 In the Echo Company's current year taxable income, how much should be included for dividends received?

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Answers (1)

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Mariam Cain · Answer 1

220 dollars should be included in companies taxable income.

Explanation:

This problem wants us to calculate the amount of dividends to be included in the Echo Company's taxable income for the current year. Echo Company's has received dividend from 20% owned taxable domestic compnay, The company is eligible for 80% dividends received deduction. We can compute this value using the following formula:

Dividends=$1,100 - (80% * $1,100)

Dividends = 1,100-$880

Dividends=$220