U.S. corporations are eligible for a foreign tax credit for withholding taxes imposed on dividends received from 100 percent owned foreign corporations, even if the dividend qualifies for the 100 percent dividends received deduction.

Question

Quizplus · Accepted Answer

U.S. corporations are generally not eligible for a foreign tax credit for taxes imposed on dividends that qualify for the 100 percent dividends received deduction (DRD) under the participation exemption system, as the purpose of the DRD is to exempt foreign dividends from U.S. taxation, negating the need for a foreign tax credit.

US Corporations Are Eligible for a Foreign Tax Credit for Withholding