If Parent company A owns 80% of subsidiary B, and subsidiary B makes $100,000 in profit. How are they taxed?

If Parent company A owns 80% of subsidiary B, and subsidiary B makes $100,000 in profit. I believe Parent Company A reieves $80,000, (80%X$100,000= $80,000). true or false?





It is also my understanding that if a parent company owns at least 80% of a subsidiary, the parent company is allowed to recieve tax free dividends.





QUESTION 1: Does subsidiary B pay taxes for $20,000? Or does subsidiary B pay taxes for the whole $100,000?





QUESTION 2: If the parent company wants to recieve tax free dividends, will the subsidiary need to be a corporation or can the sub be an LLC? (Can LLC's even distribute ';dividends';?)





QUESTION 3: If Parent Company A is a single member LLC being taxed as a disregarded entity, how should the subsidiary be set up? Does the subsidiary need to be an LLC taxed as a corporation or taxed as a disregarded entity like the parent? Or should the subsidiary be a strait up corporation (C-Corp or S-Corp) %26amp; why?





Please explain in detail %26amp; I dont mind long answers. THANKSIf Parent company A owns 80% of subsidiary B, and subsidiary B makes $100,000 in profit. How are they taxed?
I agree with the answerer above...





Perhaps the answer is buried somewhere in your accounting textbook!





Otherwise, we will charge $150 per hour for the answer!If Parent company A owns 80% of subsidiary B, and subsidiary B makes $100,000 in profit. How are they taxed?
Stop trying to cheat on your homework.