dividends received deduction

what is the point of the DRD

to prevent triple taxation

ownership of 0-20% = DRD deduction ___

50%

Ownership of 20-80% = DRD ____

65%

ownership of 80% or more = DRD ____

100% (consolidate)

DRD 100%= own____

80% or more

DRD 65% = ownership ____

20 to < 80%

DRD 50% = ownership _______

0-20%

to qualify for the DRD what are the two requirements

1) must own stock for at least 46 days during the 91 day period 2
2) 91 day period must begin on the date 45 days before the ex-dividend date

DRD equal the ____ of:

Lessor
1) 50% (65% or 100%) dividends received
2) 50% (65% or 100%) of taxable income computed without the DRD, any NOL carryforward, or capital loss carryback

EXCEPTION to DRD taxable income limitation

does not apply if taking the full dividends received deduction results in a NOL

what happens if the exception to the DRD occurs

take the greater of the two numbers

entities not eligible for DRD

personal service corporations, personal holding companies, and S corporations