Well it is true....but it is not...The exam is tricky...here is an example from my study material....
In the current year, Brown, a C corporation has gross income (before dividends) of $900,000 and deductions of $1,100,000 (excluding the dividends-received deduction). Brown received dividends of $100,000 from a Fortune 500 corporation during the current year.
What is Brown's net operating loss?
A. $100,000
B. $130,000
C. $170,000
D. $200,000
The answer is C.....because you have a 70% DRD.....
You may be saying to yourself....Self, the questions didn't appear to have said how much % ownership their was...
OHHHHHH...but itdid in its own snicky, twisted, evil, conniving way...(OK I may of got carried away there, I hate these tricky questions)
Readcarefully...the key phrase is....Fortune 500 company.....
You may be saying to yourself...Self, how is that a magic word...Let me tell you or let my study material tell you...
Per Study material..."Since the dividend is received from a Fortune 500 corporation it is reasonable to assume that Brown owns less than 20% of the corporation, so the dividends received deduction is 70% of the dividends received, or $70,000. This increases the NOL to $170,000."
smh...Reasonably assumed...You know what they say when you assume...lol
Sorry had to vent and inform other test takers to be very careful....