Question

U.S. corporations are eligible for a foreign tax credit for withholding taxes imposed on dividends received...

U.S. corporations are eligible for a foreign tax credit for withholding taxes imposed on dividends received from 100 percent owned foreign corporations, even if the dividend qualifies for the 100 percent dividends received deduction.

TRUE/FALSE

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Answer #1

Answer:False

Explanation:

  • As per IRC 245A, If 100% dividend received deduction allowed then A foreign tax credit or deduction for foreign taxes paid or accrued is not allowed by a corporate U.S. shareholder with respect to any dividend.

Thus,

If the dividend qualifies for the 100 percent dividends received deduction then U.S. corporations are Not eligible for a foreign tax credit for withholding taxes imposed on dividends received from 100 percent owned foreign corporations.

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