Question

Corporations are taxed on dividends received at the:

1) special dividend rate of 15
2) 25
3) ordinary corporate tax rate

Answer 1

Corporations are taxed on dividends at the ordinary corporate tax rate, which is a flat 21% in the United States after recent tax legislation. Prior to 2017, the rates varied based on income levels.

Step-by-step explanation:

Corporate Taxes on Dividends Received

Corporations are taxed on dividends received at the ordinary corporate tax rate. The rate of tax varies by jurisdiction, but currently, in the United States, the corporate tax rate is a flat 21% after the Tax Cuts and Jobs Act of 2017. Prior to this change, the corporate tax rates ranged from 15% to 35% based on the company's income level. It's important to note that the specific taxation of dividends can depend on various factors including holding periods and whether the dividends qualify for the dividends-received deduction, which can provide a significant tax saving for corporations receiving dividends from other corporations.

Corporations are taxed on dividends received at the ordinary corporate tax rate. This means that the rate at which corporations are taxed on dividends depends on the regular corporate tax rate for that jurisdiction. For example, in the United States, the current corporate tax rate is 21%.