# Jazz Corporation owns 50% of the Williams Corp. stock. Williams distributed a $10,000 dividend to... ## Question: Jazz Corporation owns 50% of the Williams Corp. stock. Williams distributed a$10,000 dividend to Jazz Corporation. Jazz Corp.'s taxable income before the dividend was $100,000. What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.? A.$0

B. $7,000 C.$8,000

D. $10,000 ## Cash Dividends Cash Dividends is a type of incentive being given by a corporation to both its common and preferred shareholders following accumulating enough revenues. Thru consistent cash dividends payout, a corporation will be able to make its business look more profitable to the investing public due to higher rate of return of its shares. ## Answer and Explanation: Answer: C.$8,000

Rationale:

Jazz can deduct 80% of the dividend income he received since his holding to William Corp. is at 50% which is within the range of the aforementioned deductible rate. Hence, the solution for this problem is: 80% x $10,000 =$8,000