24.What is the character of the dividends-received subtraction? What stacks are empower to claim this deduction? What dividends discard for this deduction?
The purpose of dividends-received deduction is to prevent double taxation of earnings. The Dividend Received Reduction (DRD) is the concept where a corporation receiving a dividend from another corporation does not have to earnings taxes on that dividend they received. For example, company A ordain requital taxes on income earned(first taxed) and if it distributes any of this income to company B which is shareholder, then company B will include this as a part of their income and will have to include this in dutiable income (second taxed), then pay dividend to its shareholder where this dividend would taxed(third tax). To avoid triple tax the government result domestic corporations to take a DRD based on their character ownership. A percentage ownership of less than 20% is allowed a DRD of 70%;a company which owns 20% and less than 80%, receives a DRD of 80% and a company which has ownership of 80% or more receives a DRD of 100%. Personal inspection and repair corporations, personal holding companies and S corporations are not qualified for DRD. Domestic corporation who pay corporate income taxes are entitled to claim this deduction.
It is the dividends received by a corporation that qualify for this deduction, since the corporation would further pay dividend which would create triple taxation.
51.What is the purpose of the reconciliation of taxable income with book income?
Book income will dissent from taxable income because book income must follow US generally accepted accounting principles rules. Hence there will be items included in book income that will not be included in taxable income. For example interest received on declare and municipal obligations, is not taxable but is included as revenue for book income. This must be excluded for calculation of taxable income. Likewise there are expenses such as life-insurance premiums that would be an...If you want to get a full essay, order it on our website: Ordercustompaper.com
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