Light Corporation purchased for $400,000 shares of Beer Corporation common stock (less than 5%

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 Light Corporation purchased for $400,000 shares of Beer Corporation common stock (less than 5% of the outstanding Beer stock) at the beginning of the current year. It used $120,000 of borrowed money and $280,000 of its own cash to make this purchase. Light paid $12,000 of interest on the debt this year. Light received a $25,000 cash dividend on the Beer stock on September 1 of the current year.

Requirements

a.
What amount can Light deduct for the interest paid on the loan?
b.
What dividends-received deduction can Light claim with respect to the dividend?
Requirement a. What amount can Light deduct for the interest paid on the loan?Light may deduct all the interest paid on the loan.

Requirement b. What dividends-received deduction can Light

claim with respect to the dividend?

Light must include
 
of the $25,000 dividends received from Beer in its income. The dividends-received deduction for
Light is $
 
.
 
 
 
 
 
 
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