Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Chester and Ramona Arnold own the shares of Mainly Inc., split 60/40 respectively. Chester is Ramona's parent. Ramona also owns 55% of the shares of

Chester and Ramona Arnold own the shares of Mainly Inc., split 60/40 respectively. Chester is Ramona's parent. Ramona also owns 55% of the shares of Purely Inc., and the remaining shares are owned by Roshan Kabiri (25%) and Dion Karras (20%). Roshan and Dion are not related to one another, nor are they related to Chester and Ramona. All of the shares held in both corporations are common shares. In Year 1 Mainly Inc. earned $700,000 of active business income and Purely Inc. earned $500,000 of active business income. Mainly's taxable income was $750,000 and Purely's taxable income was $500,000. Mainly reported $100,000 of adjusted aggregate investment income in the previous year. Purely did not report any investment income. The two companies have decided that Purely will not use any of the small business deductions in 2020. The combined taxable capital of the two corporations is less than $10 million. 

How much of the small business deduction is available to Mainly Inc. in Year 1?

Step by Step Solution

3.43 Rating (156 Votes )

There are 3 Steps involved in it

Step: 1

Solution Given Mainly Inc Adjusted aggregate investment income 100000 Purely Inc taxabl... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Federal Taxation 2015 Corporations Partnerships Estates & Trusts

Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson

28th Edition

978-0133806601, 013380660X, 133822141, 978-0133822144

More Books

Students also viewed these Accounting questions

Question

3 What are the various ways to handle the payment of estate tax?

Answered: 1 week ago

Question

Outline the three steps in time management and in money management.

Answered: 1 week ago

Question

19. What does fMRI measurepg109

Answered: 1 week ago