ACCOUNTING TAX

1. The following statements about the dividends-received deduction are true, except:

a. The stock on which dividends are received must be half for at least 46 days.

b. The deduction is not avilable if the long position is offset by a similar short position.

c. The deduction is limited to a percentage of taxable income prior to charitable contribution, net operating loss, and capital loss deductions.

d. Even if a consolidated return is not filed, a 100% dividends-received deduction is available for payments between members of the same affiliated group.

2. Indo Corporation was organized on January 4, 2018, and began active business on January 5, 2018. Indo incurred the following expenses in connection with creating its business.

Professional fees for stock issurance	$400
State incorporation fees	200
Printing costs for stock certificates	150
Broker's commissions on sale of stock	700
Legal fees for drafting the charter	600
Expenses for temporary directors	500

What is the maxmium amount of organizational expenses which may be deducted by Indo on its 2018 tax return?

a. $1,300 b.$1,700 c. $1,850 d. $2,550 e. None of the above