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

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Business

Gillian Scott

13 September, 19:16

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

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Luis Johnston · Answer 1

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.