The Dividends Received Deduction May Be Subject to a Limitation

question 95

True/False

The dividends received deduction may be subject to a limitation based on a percentage of taxable income computed without regard to the NOL deduction, the domestic production activities deduction, the dividends received deduction, and any capital loss carryback to the current tax year.

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Definitions:

Nominal Consideration

A token amount in a contract to acknowledge the agreement, without intending it to be a true reflection of the value exchanged.

Gratuitous Promises

Promises made without the expectation of receiving anything in return, often lacking legal enforceability due to the absence of consideration.

True Bargains

Deals that are genuinely advantageous, offering good value for the money paid.

Legal Consideration

Something of value, which can be a promise, service, or object, exchanged between parties as part of a contract.