Palm owns a 70% interest in Sable, a domestic subsidiary. Sable is not part of Palm’s affiliated group. Palm will pay taxes on
A. none of the dividends it receives from Sable.
B. 20% of the dividends it receives from Sable.
C. 66% of the dividends it receives from Sable.
D. 80% of the dividends it receives from Sable.
Answer:B
Palm owns a 70% interest in Sable, a domestic subsidiary. Sable is not part of Palm’s affiliated group. Palm will pay taxes on
A. none of the dividends it receives from Sable. B. 20% of the dividends it receives from Sable. C. 66% of the dividends it receives from Sable. D. 80% of the dividends it receives from Sable.