Corporations enjoy a tax advantage associated with dividends due to ________.

Question

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The 70% exclusion rule allows corporations to exclude 70% of the dividends received from other corporations from their taxable income. This tax advantage encourages corporations to invest in each other and provides an incentive for companies to distribute their profits as dividends rather than retaining them within the company. A, C, and D are not applicable to the tax advantage associated with dividends.

Corporations Enjoy a Tax Advantage Associated with Dividends Due to ________