If the corporate tax rate is 35 percent, what is the maximum effective tax rate on dividends received by another corporation?

Question

Quizplus · Accepted Answer

The maximum effective tax rate on dividends received by another corporation would be 35% - (35% x 0.7) = 10.5%. This is because the dividends received would have already been taxed at the corporate level at 35%, but the receiving corporation is only taxed on 65% of the dividend amount (35% is excluded as it is already taxed at the corporate level).

If the Corporate Tax Rate Is 35 Percent, What Is