Compute its maximum dividends-paid deduction

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Question - Lark Enterprises. Inc. is a personal holding company. From the information below, compute its maximum dividends-paid deduction.

a. Land with a basis of $10,000 and a value of $50,000 was distributed during the taxable year ending December 31 to its two 50 percent shareholders as equal tenants in common.

b. Two months later, cash of $5,000 was distributed to the shareholder and three months later property worth $5,000 to the other.

c. On February 10 of the following year, $3,000 was distributed to each shareholder and an election was made to treat the dividends as paid the previous year.

d. A timely election was made to treat $5,000 each as consent dividends.

Reference no: EM132681679

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