The taxpayer has an allowable dividends received deduction
This example makes clear that the dividends received deduction
equal to 85 percent of qualifying dividends is allocated solely against qualifying dividends.
245 Dividends Received Deduction
for Foreign Corporations
* Amounts deducted pursuant to the dividends received deduction
The ordinary income accrued under the OID-like rules is not a dividend and therefore a corporate holder would apparently not be eligible for the 70% dividends received deduction
The consolidated return rules or dividends received deduction
eliminate the second level of taxation in most cases involving a U.S.
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
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.S.
The attraction of traditional preferred stock among corporate investors has always been the availability of the section 243(a)(1) (1) dividends received deduction
The TAM concludes, based on the legislative history of the Subchapter S Revision Act of 1982 (SSRA), that this later provision was meant to apply individual rather than corporate rules to an S corporation receiving distributions on stock it held - presumably in the calculation of the dividends received deduction
170(b)(2), is that the deduction for any tax year is limited to 10% of taxable income determined without regard to charitable contributions, special deductions (dividends received deduction
, etc.) and net operating and capital loss carry-backs.