If a Corporation Owns Less Than 20% of the Stock

question 110

True/False

If a corporation owns less than 20% of the stock of the distributing corporation,the dividends-received deduction is not allowed for the recipient corporation.

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Definitions:

Par Value Bonds

Bonds that are issued and redeemed at their face value, the value printed on the bond itself.

Issuing Bonds

The process of a corporation or government entity raising capital by selling bonds to investors, which are essentially loans from the investors to the issuer.

Par Value

A nominal value assigned to a security or stock, often used to determine its face value rather than market value.

Market Rate

The current price or interest rate at which goods, services, or financial instruments are traded in the open market.