The dividends received deduction cannot cause a net operating loss. The deduction can reduce income to zero but not below zero.
A dividends received deduction is limited to 70% or 80% of taxable income unless it creates or increases a net operating loss deduction, in which case the full amount is allowed.

Question

Quizplus · Accepted Answer

The dividends received deduction can indeed cause or increase a net operating loss if it exceeds taxable income, as the full deduction is allowed in such cases.

The Dividends Received Deduction Cannot Cause a Net Operating Loss