On the other hand, if this loss is smaller than the dividend income reduced by an unrestricted dividends received deduction
, the limitation on the aggregate amount of net income will apply.
This example makes clear that the dividends received deduction
equal to 85 percent of qualifying dividends is allocated solely against qualifying dividends.
In general, dividends on stock are subject to a dividends received deduction
(see IRC [Section] 243 and 953(d) ).
21) See NYSBA Comments on Dividends Received Deduction
, TAX NOTES TODAY, March 22, 2005 (2005 TNT 54-18), noting that the general principle of section 41(f) (holding that the attributes go with the trade or business that generated them) leaves open the question of whether the various section 965 attributes attach to the CFC, the direct U.
Either dividends paid from these amounts would be subject to the dividends received deduction
under IRC Section 243 or not.
Amounts deducted pursuant to the dividends received deduction
The portions of the distributions deemed "Ordinary Income, Tax Exempt Income, Long-Term Gains, Qualified Dividend Income, Dividends Received Deduction
, Direct U.
The consolidated return rules or dividends received deduction
eliminate the second level of taxation in most cases involving a U.
Use of an FSC will result in double taxation because the S shareholders are not eligible for the special FSC dividends received deduction
An important specific exception, however, is the corporate dividends received deduction
Distribution Tax Characteristics: Information about the tax status of fund distributions, including the portions eligible to be treated as qualified dividend income or as qualifying for the dividends received deduction
It would not normally be recommended that a foreign parent own a foreign sales corporation (FSC), since foreign shareholders do not get the FSC dividends received deduction
allowed to U.