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
Domestic dividend income is for the most part eliminated from federal taxable income by operation of the federal dividends received deduction
(in section 243 of the Internal Revenue Code).
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 portions of the distributions deemed "Ordinary Income, Tax Exempt Income, Long-Term Gains, Qualified Dividend Income, Dividends Received Deduction
, Direct U.
The company also recognized $20 million in tax benefits primarily as a result of the new Dividends Received Deduction
provided in the American Jobs Creation Act, which was signed into law on October 22, 2004.
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