Identify which of the following statements is true.
A)The dividends-received deduction is designed to reduce double taxation of corporate dividends.
B)The full 65% dividends-received deduction is available without restriction.
C)If a corporation receives dividends eligible for the 65% dividends-received deduction and the 50% dividends-received deduction, the 50% dividends-received deduction reduces taxable income prior to the 65% deduction.
D)All of the above are false.

Question

Quizplus · Accepted Answer

The dividends-received deduction is indeed designed to reduce double taxation of corporate dividends. Option B is false because the full 65% dividends-received deduction is subject to certain restrictions such as holding period requirements. Option C is false because the 65% deduction is applied first before the 50% deduction.

Identify Which of the Following Statements Is True