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A corporation buys shares of another domestic corporation. They receive $100,000 of dividend income. They hold the...

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Accounting

A corporation buys shares of another domesticcorporation. They receive $100,000 of dividend income. They holdthe shares for 75 days and then sell the stock. What taxconsequences accrue to the corporation from the receipt of thedividend? What is the rationale for the rule? Would the resultchange if the corporation only held the stock for 5 days? If so,why? Does it really violate the rationale for the general rule?

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As per the applicable rules a corporation is eligible for dividend received deduction in the following amounts 1 50 of the dividend received from the other corporation 2 65 of the dividend received if the corporation that received the dividend owns 20 or more of the stock of the dividend distributing corporation 3 100 of the dividend received if    See Answer
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