Dividends received by a corporation on an investment in the common and preferred stock of another corporation, where ownership in the dividend paying corporation is less than 20%, is subject to 70 percent exclusion for tax purposes.

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Quizplus · Accepted Answer

This statement is true. Dividends received by a corporation on an investment in the common and preferred stock of another corporation, where ownership in the dividend paying corporation is less than 20%, is subject to 70 percent exclusion for tax purposes. This means that only 30% of the dividends received will be taxable for the receiving corporation.

Dividends Received by a Corporation on an Investment in the Common