Twin Turbines Corp., a Delaware corporation, has 200,000 shares that are issued and outstanding. Twin Turbines Corp. had a banner year in 2021, earning over $1 million in profits. To reward shareholders, the Twin Turbines Corp. board of directors declared and paid a $1 dividend per share to each of its shareholders.

Energy Solutions Inc., a corporation organized in Maryland, owns 1,000 shares of Twin Turbines and receives a dividend of $1,000. Which of the following is true about Energy Solutions Inc.'s $20,000 distribution from Twin Turbines Corp.?

a) The entire distribution is subject to U.S. tax

b) 30% of the distribution is subject to U.S. tax

c) 50% of the distribution is subject to U.S. tax

d) None of the distribution is subject to U.S. tax

Clear Water Inc., a corporation organized in Vermont, owns 190,000 shares of Twin Turbines Corp. and receives a dividend of $100,000. What is the U.S. tax on Crystal Water's dividend from Twin Power?

a) The entire distribution is subject to U.S. tax

b) 30% of the distribution is subject to U.S. tax

c) 50% of the distribution is subject to U.S. tax

d) None of the distribution is subject to U.S. tax