Red Corporation, which owns stock in Blue Corporation, had a net operating income of $400,000 for the year Blue pays Red a dividend of$60,000 Red takes a dividends received deduction of $48,000 Which of the following statements is correct A Red owns less than 20 of Blue Corporation B Red owns 20 or...

C Red owns 80 of Blue Corporation Red ow ...

Red Corporation, which owns stock in Blue Corporation, had a net operating income of $400,000 for the

Question:

Red Corporation, which owns stock in Blue Corporation, had a net operating income of $400,000 for the year. Blue pays Red a of$60,000. Red takes a dividends received deduction of $48,000. Which of the following statements is correct?
A. Red owns less than 20% of Blue Corporation
B. Red owns 20% or more, but less than 80% of Blue Corporation.
C. Red owns 80% of Blue Corporation.
D. Red owns 80% or more of Blue Corporation.
E. None of the above

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...