Corporation A owns 15 percent of the stock of corporation B. Corporation B pays corporation A $100,000 in dividends in 2002. Corporation A must pay tax on
A. $100,000 of ordinary income.
B. $ 30,000 of ordinary income.
C. $ 70,000 of ordinary income.
D. $ 70,000 of capital gain.
Answer:B
Corporation A owns 15 percent of the stock of corporation B. Corporation B pays corporation A $100,000 in dividends in 2002. Corporation A must pay tax on
A. $100,000 of ordinary income. B. $ 30,000 of ordinary income. C. $ 70,000 of ordinary income. D. $ 70,000 of capital gain.