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Marathon Inc. (a C corporation) reported $2,000,000 of taxable income in the current year. During the year, it distributed $200,000 as dividends to its shareholders
Marathon Inc. (a C corporation) reported $2,000,000 of taxable income in the current year. During the year, it distributed $200,000 as dividends to its shareholders as follows: (Leave no answer blank. Enter zero if applicable.)
- $10,000 to Guy, a 5 percent individual shareholder.
- $30,000 to Little Rock Corp., a 15 percent shareholder (C corporation).
- $160,000 to other shareholders.
- How much of the dividend payment did Marathon deduct in determining its taxable income?
- Assuming Guys marginal ordinary tax rate is 37 percent, how much tax will he pay on the $10,000 dividend he received from Marathon Inc. (including the net investment income tax)?
- What amount of tax will Little Rock Corp. pay on the $30,000 dividend it received from Marathon Inc. (50 percent dividends received deduction)? (Round your final answers to the nearest whole dollar amounts.)
1. | Amount deductible | ___________? |
2. | Tax paid | ___________? |
3. | Tax paid | ___________? |
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