A corporation must generally pay taxes on only 15 percent of the dividends (preferred or common)that it receives from another corporation.

Question

Quizplus · Accepted Answer

This statement is true according to the current tax law in the United States. Dividends received by corporations are subject to a preferential tax rate of 15% (or 20% for high-income taxpayers) under the qualified dividend rule. However, there are some exceptions and limitations that may apply depending on the type of dividend, the holding period, and the tax status of the recipient corporation.

A Corporation Must Generally Pay Taxes on Only 15 Percent