Which of the Following Statements Is Incorrect Regarding the Dividends

question 104

Multiple Choice

Which of the following statements is incorrect regarding the dividends received deduction?

• A) A corporation must hold stock for more than 90 days in order to qualify for a deduction with respect to dividends on such stock.
• B) The taxable income limitation does not apply with respect to the 100% deduction available to members of an affiliated group.
• C) If a stock purchase is financed 75% by debt, the deduction for dividends on such stock is reduced by 75%.
• D) The taxable income limitation does not apply if the normal deduction (i.e., 50% or 65% of dividends) results in a net operating loss for the corporation.
• E) None of these.

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Definitions:

National Government

The organization and institution that possess the political sovereignty and control for a nation or country.

Slavery

A system in which individuals are owned by others, deprived of personal freedom, and forced to work.

Supreme Court

The highest federal court in the United States, with ultimate appellate jurisdiction over all federal courts and direct jurisdiction over some types of cases.

John Marshall

An influential Chief Justice of the Supreme Court (1801-1835) known for establishing the principle of judicial review.