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Basic Question 1 of 13
The dividends-received deduction for corporations results in a ______ difference.
B. timing
C. temporary
A. permanent
B. timing
C. temporary
User Contributed Comments 13
| User | Comment |
|---|---|
| kalps | Becos dividends are received net of income taxes ??? or what ? |
| Gina | i think because some dividends are not fully taxed, but count fully as income on the books. |
| Done | By law corporations get a 70% deduction on dividends and have to pay the tax rate on the remainder (whatever that is). This is suppose to stimulate corporations' to buy ...From my series 7 books |
| ehc0791 | Corp A has profit, pays dividends to share holder which happens to be another Corp B. Then B will be entitled for dividends-received deduction, ie, the dividends only shows on I/S, not tax return. |
| ConnieCher | For tax purposes, depending on the percentage of stock ownership, a portion of dividends received by a corporation may not be taxable. |
| sanyukta | how are foreign students supp to know how dividends are taxed!! |
| Crown01 | Dividends received by your company, were paid by the other company. Those pay-out dividends had been taxed already in that company. Therefore no double taxed here. |
| magicchip | different taxation rates due to gross up. |
| cfairs | makes sense.. portion of dividends received not being taxable.. |
| wundac | portion of dividend is not taxable |
| Fotsta | I agree with Crown01. That's the reason |
| peteSP | div are deemed to have incurred a Tax deduction at source, / t% = gross div |
| kingirm | Dividends are already taxed at the source company hence at parent company they are tax exempt in order to prevent double taxation |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain how deferred tax liabilities and assets are created and the factors that determine how a company's deferred tax liabilities and assets should be treated for the purposes of financial analysis
CFA® 2025 Level I Curriculum, Volume 3, Module 9.