Reference no: EM132678255

Question - Riverbend Inc. received a $327,500 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $2,200,000 before deducting the dividends received deduction (DRD), a $62,500 NOL carryover, and a $148,000 charitable contribution.

Receiving Corporation's Stock Ownership in Distributing Corporation's Stock Dividends Received Deduction Percentage

Less than 20 percent 50%

At least 20 percent but less than 80 percent 65 80 percent or more *100

Required -

a. What is Riverbend's deductible DRD assuming it owns 10 percent of Hobble Corporation?

b. What is Riverbend's DRD assuming it owns 76 percent of Hobble Corporation?

c. What is Riverbend's DRD assuming it owns 91 percent of Hobble Corporation?