Dividends Received Deductions Practice Test

Rohr, a C corporation, owns 18% of Alda Corporation. Alda paid a $3,000 cash dividend to Rohr. What is the amount of Rorh’s dividends-received deduction?

In Year 2, Buy Corp., an accrual basis calendar year C corporation, received $100,000 in dividend income from the common stock that it held in an unrelated domestic corporation. The stock was not debt financed and was held for over a year. Buy recorded the following information for Year 2:

• Loss from Buy’s operations: (10,000)
• Dividends received: 100,000
• Taxable income (before dividends-received deduction): 90,000

Buy’s dividends-received deduction on its Year 2 tax return was: