Westside's taxable income is $60,000.
Westside, Inc. owns 15% of Inns brook's common stock. This year, the Westside generated $50,000 and received $20,000 dividends from Inns brook. Thus, Westside's taxable income is $60,000.
Taxable Income = $50,000 + ( $20,000*0.5) = $60,000
Taxable income is the part of an income which is subject to taxation. This can be the income of an individual or an organization.
The company which receives the dividend from another company can claim the Dividend Received Deduction (DRD). The DRD allows to deduct that dividend from its income and reduce its income tax accordingly.
Hence, the Westside's taxable income is $60,000.
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