A corporation must generally pay taxes on only 30% of the dividends (preferred or common) that it receives from another corporation.

Question

Quizplus · Accepted Answer

The tax law provides that any corporation that receives preferred or common stock dividends from another corporation must add only 30% of such dividends to its taxable income. Thus, if a $5 dividend is received, only 30% of the $5, or $1.50, would be taxable to the corporate recipient.

A Corporation Must Generally Pay Taxes on Only 30% of the Dividends