Sharp corp. owns 10% of the Jones corp. stock. Jones distributed a $10,000 dividend to Sharp corp. Sharp corp taxable income (loss) before the dividend income and the dividend received deduction was a loss of $6,000. What is the amount of Sharp dividend received deduction on the dividend it received from Sharp corp?

Does Sharp get to deduct the 50% for owning less than 20% of stock when they have a loss in taxable income?

Here are the possible answers:

$0

$2,000

$4,000

$5,000