Corporation A receives a dividend from Corporation B. It includes the dividend in gross income for tax purposes
but includes a pro-rata portion of B’s earnings in its financial accounting income. If A has accounted for the dividend correctly (using the general rule), how much of B’s stock does A own?
Multiple Choice
A owns less than 20 percent of the stock of B.
A owns more than 50 percent of the stock of B.
Cannot be determined.
A owns at least 20 but not more than 50 percent of the stock of B.
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