Marathon Inc. (a C corporation) reported $1,550,000 of taxable income in the current year. During the year it distributed $155,000 as dividends to its shareholders as follows: (new corporate income tax rate has been mentioned as 21% on all taxable income as per the recent change. )

• $7,750 to Guy, a 5% individual shareholder.
• $23,250 to Little Rock Corp., a 15 percent shareholder (C corporation)
• $124,000 to other shareholders.

1. How much of the dividend payment did Marathon deduct in determining its taxable income?
2. Assuming Guys marginal ordinary tax rate is 37%, how much tax will he pay on the $7,750 dividend he received from Marathon Inc. (including the net investment income tax)?

What amount of tax will Little Rock Corp. pay on the $23,250 dividend it received from Marathon Inc. (50 percent dividends received deduction)?