For shareholders that are corporations, Redwood's dividend distributions are not generally eligible for the corporate dividends-received deduction
Economic Reality Problem With the Dividends-Received Deduction
To that end it passed IRC section 246A, which prevents corporations from claiming a dividends-received deduction
against dividends from stock purchased using debt that generates an interest expense deduction.
These rules are quite harsh, and may have serious adverse consequences for taxpayers that filled their base period amounts with high-taxed CFC dividends, while claiming the section 965 dividends-received deduction
(DRD) with respect to low-taxed dividends.
To address this, the AJCA creates an 85% temporary dividends-received deduction
(TDRD) for dividends paid to U.
Once the amount of foreign earnings eligible for the dividends-received deduction
is determined, the U.
Take advantage of the dividends-received deduction
The exceptions also extend to relationships that provide for 100% of dividends-received deduction
and the 80% dividend-received deduction allowed when the taxpayer owns 20% of the outstanding stock of the investee.
The surge in financial innovation that occurred during the 1980s produced a family of securities that were designed to lower the cost of preferred stock financing by widening the availability of the Internal Revenue Code Section 246(c) dividends-received deduction
Illinois Court Rejects Dividends-Received Deduction
For stockholders that are corporations, Anworth's dividends are not eligible for the corporate dividends-received deduction
The AJCA sets out the various requirements to be met in order to qualify under the Homeland Relief mechanism, so that an 85-percent dividends-received deduction
can be obtained on repatriation of funds to the United States.