The "dividend received deduction" applies only to domestic subsidiaries.

Question

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The "dividend received deduction" (DRD) primarily applies to dividends received from domestic corporations by other domestic corporations, allowing them to deduct a portion of the dividends received from their taxable income, thereby reducing the overall tax burden. This provision is designed to mitigate the effects of double taxation on corporate income.

The "Dividend Received Deduction" Applies Only to Domestic Subsidiaries