Which of the Following Statements Is Incorrect Regarding the Dividends

question 100

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 the above.

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The highest form of law in a legal system, to which all other laws must conform; in the United States, this refers to the U.S. Constitution.

Checks and Balances

A system in government designed to prevent any single branch from gaining too much power, allowing each branch to limit or check the powers of the others.

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The part of the government responsible for creating laws, consisting of elected representatives in many countries.

Legislative

Pertaining to the branch of government responsible for making laws.