Which of the Following Statements Is Incorrect Regarding the Dividends

question 102

Multiple Choice

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

• A)A corporation must hold stock for more than 45 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. ,70% or 80% of dividends)results in a net operating loss for the corporation.
• E)None of the above.

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Definitions:

Vestibule

An anatomical space or cavity at the entrance of some structures, especially the central part of the bony labyrinth in the inner ear, involved in balance.

Cochlea

A spiral-shaped, fluid-filled inner ear structure essential for hearing.

Cochlear Nerve

A nerve responsible for transmitting auditory information from the cochlea of the inner ear to the brain.

Sensorineural Deafness

A type of hearing loss that occurs due to damage to the inner ear or to the pathway from the inner ear to the brain.