[jessanqi]

Can someone please kindly advise the below question??

Thank you so much in advance!!!

Elmer Elmont received Form 1099-DIV from Power Corporation for the calendar year 20X5, showing the following information:

Box
Explanation
Amount
1a
Total Ordinary Dividends
$500
1b
Qualified dividends
$250
2
Total Capital gain distribution
$170
3
Non-dividend distributions
$80

Elsie Elmont, Elmer’s wife, did not own any of the Power Corporation shares, but she did receive $175 in interest on a savings account at the Moss National Bank and $1,475 in interest on U.S. Treasury Certificates. Elmer and Elsie Elmont filed a joint income tax return for 20X5.

What portion of the dividends is reportable as dividend income (before any exclusions) by the Elmonts?

Correct Answer: $250

Notes
The correct answer is B. Of the total amount of Power Corporation dividends received by Elmer, $170 is a capital gain distribution and $80 is a nontaxable distribution (such as a return of capital). These amounts are not reported as dividends. Thus, Elmer reports only $250 ($500 less the above items) as dividend income.