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Business, 22.07.2021 23:10 zariahirons44

Marathon Inc. (a C corporation) reported $1,000,000 of taxable income in the current year. During the year, it distributed $100,000 as dividends to its shareholders as follows: $5,000 to Guy, a 5 percent individual shareholder.
$15,000 to Little Rock Corp. a 15 percent shareholder (C corporation).
$80,000 to other shareholders.
a) How much of the dividend payment did Marathon deduct in determining its taxable income?
b) Assuming Guy’s marginal ordinary tax rate is 35 percent, how much tax will he pay on the $5,000 dividend he received from Marathon Inc.?
c) Assuming Little Rock Corp.’s marginal tax rate is 34 percent, what amount of tax will it pay on the $15,000 dividend it received from Marathon Inc. (70 percent dividends received deduction)?
d) Complete Form 1120 Schedule C for Little Rock Corp. to reflect its dividends received deduction.
e) On what line of Little Rock Corp.’s Form 1120 page 1 is the dividend from Marathon Inc. reported, and on what line of Little Rock Corp.’s Form 1120 is its dividends received deduction reported?

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Marathon Inc. (a C corporation) reported $1,000,000 of taxable income in the current year. During th...
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