Theta Corporation reports the following results for the current year:
Gross profits on sales ……………………………………………………. $220,000
Dividends from less-than-20%-owned domestic corporations ………….. 100,000
Operating expenses ……………………………………………………… 218,000
a. What is Theta’s taxable income for the current year, assuming qualified production activities income is $2,000?
b. How would your answer to Part a change if Theta’s operating expenses are instead $234,000, assuming qualified production activities income is zero or negative?
c. How would your answer to Part a change if Theta’s operating expenses are instead $252,000, assuming qualified production activities income is zero or negative?
d. How would your answers to Parts a, b, and c change if Theta received $75,000 of the dividends from a 20%-owned corporation and the remaining $25,000 from a less- than-20%-owned corporation?