Corporations may be taxed on less than 100% of dividends received due to the dividends-received deduction,while individuals are taxed on all of their dividend income.

Question

Quizplus · Accepted Answer

This statement is true. Corporations are allowed to deduct a portion of the dividends they receive from other corporations (typically 50% or 65%) before calculating their taxable income, while individuals are not eligible for this deduction and must pay taxes on the full amount of their dividend income.

Corporations May Be Taxed on Less Than 100% of Dividends