A provision in the tax code exempts ________ from federal income taxation, if the recipient is a qualified corporation.

Question

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The tax code allows for a dividends-received deduction, which for many years allowed corporations to exclude 70% of the income from dividends received from other U.S. corporations from their taxable income, assuming the dividends are from a qualified corporation. This provision is designed to mitigate the effects of double taxation on corporate income.

A Provision in the Tax Code Exempts ________ from Federal