Untitled2 - 70% of the dividend received. The corporation's

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24) The purpose of the dividends-received deduction is if the corporation has a net operating loss or would have a net operating loss if it received the full deduction. The dividends-received deduction is also available if the taxable income is greater than the dividend received. Dividends that are paid by domestic corporations subject to the corporate tax are qualified for the dividends-received deduction. The dividends that are paid out of a corporation's earnings and profits qualify. S corporations are not eligible for the dividends- received deduction since it is exempt from the corporate income tax and distributions and are not income to the recipients. 26) Corporations that are owning less than 20% of the distributing corporation may deduct
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Unformatted text preview: 70% of the dividend received. The corporation's dividends-received deduction is equal to the 70% times the lesser of: 1. dividends received from taxable, unaffiliated domestic corporations or 2. the firm's taxable income, as adjusted. 30) Net operating loss (NOL) is carried back two years and forward 20 years for a corporation. For small businesses, a NOL carryback period is five years. 62) Income = $62,000 from operations Net capital loss = $5,000 The income from operations is its ordinary income, so there will be no capital loss allowed since a corporation's capital loss is only allowed to offset any capital gains. At this point the capital loss of $5,000 will be set to carryover, and so the taxable income is $62,000 for the year....
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This note was uploaded on 10/17/2010 for the course TAX 5761 taught by Professor Wolod during the Spring '10 term at Nova Southeastern University.

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