Parent Corp. owns 15% of Sub Corp. Parent has gross income of $43,000 and allowable deductions of

Question:

Parent Corp. owns 15% of Sub Corp. Parent has gross income of $43,000 and allowable deductions of $40,000 before considering any dividends received deduction (DRD). Included in the $43,000 gross income is $8,000 in dividends from Sub. What is the maximum DRD available to Parent?
a. $1,500
b. $1,950
c. $4,000
d. $8,000

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