This deduction is available to corporations in the United States. The purpose behind this deduction is to avoid over taxation of earnings. The amount of the deduction is contingent upon the percentage of ownership a corporation owns. The percentage deductions allowed are 70%, 80% or 100%, all contingent upon ownership percentage of the intvestee corporation. In order to qualify for the dividends received deduction the ownership of stock must be over 45 days.
Adequate Disclosure, Inc. owns a minority share interest in Inadequate Disclosure, Inc. For the current year, Inadequate Disclosure Inc. distributes a 20,000 cash dividend. How much of the dividend received deduction can Adequate Disclosure, Inc. receive for the current year?
