Dividends Exclusion

[Golden Rocket]

C corporation invests in a dozen different mutual funds. Sector funds, international funds, growth funds, etc. etc. and receives dividends during the course of the year. Even though they are reinvested, they are nonetheless taxable.

For which kind of exclusion do mutual fund dividends qualify (if any)? Form 1120, Schedule C shows various kinds of dividends and their dividends received deduction. (Looks like "exclusion" is the wrong terminology nowadays).

[Roland Slugg]

Dividends received by a corporation from Regulated Investment Companies (i.e. mutual funds) do qualify for the 70% dividends received deduction. However, in many (perhaps most) cases less than 100% of the dividends received from a given RIC qualify for the deduction. The information issued at year-end by each fund should disclose the percentage that qualifies for the deduction. If that information isn't readily available, it can probably be obtained online on a payor-by-payor basis. There may even be a web site that lists this information for all mutual funds.

[Golden Rocket]

Thanks

Roland, thanks. I had about given up on a response and decided that mutual funds are not qualified because the dividends are only a secondary distribution.

I have the data on the twelve funds, and will call J Edwards. Thanks.