Question

For purposes of determining current​ E&P, which of the following items cannot be deducted in the year​ incurred? A. dividendsminus−received deduction B. charitable contribution in excess of the​ 10% limitation C. life insurance premiums​ (in excess of the increase in cash surrender value for the​ policy) paid on the lives of key employees D. capital losses in excess of capital gains

Answer 1

Answer:

A. dividendsminus−received deduction.

Explanation:

This allows companies to avoid mostly third taxes on the same earnings.

It is explained to be a federal tax deduction in the U.S. that is given to certain corporations that get dividends from related entities. The amount of the dividend that a company can deduct from its income tax is tied to how much ownership the company has in the dividend-paying company. However, there are criteria that must be met in order to qualify for a DRD.

The dividends received deduction allows a company that receives a dividend from another company to deduct that dividend from its income and reduce its income tax accordingly.