Question: Manhattan Pictures is a U S corporation that owns 100 of

Manhattan Pictures is a U.S. corporation that owns 100% of Alpha, a Greek corporation. Manhattan Pictures receives a dividend of $42,000 from Alpha. Alpha has $320,000 of accumulated earnings and profits and has paid foreign taxes that total $60,000. Manhattan Pictures’ taxable income before consideration of the dividend is $30,000. Manhattan Pictures is subject to a flat 35% U.S. tax rate.
a. What is Manhattan Pictures’ deemed paid foreign taxes with respect to the Alpha dividend?
b. What is Manhattan Pictures’ FTC?
c. How much U.S. tax after FTC will be paid on the dividend?
d. How much dividend does Manhattan Pictures get after all taxes are paid?

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  • CreatedAugust 06, 2015
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