[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.243-1]

[Page 384]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.243-1  Deduction for dividends received by corporations.

    (a)(1) A corporation is allowed a deduction under section 243 for 
dividends received from a domestic corporation which is subject to 
taxation under Chapter 1 of the Internal Revenue Code of 1954.
    (2) Except as provided in section 243(c) and in section 246, the 
deduction is:
    (i) For the taxable year, an amount equal to 85 percent of the 
dividends received from such domestic corporations during the taxable 
year (other than dividends to which subdivision (ii) or (iii) of this 
subparagraph applies).
    (ii) For a taxable year beginning after September 2, 1958, an amount 
equal to 100 percent of the dividends received from such domestic 
corporations if at the time of receipt of such dividends the recipient 
corporation is a Federal licensee under the Small Business Investment 
Act of 1958 (15 U.S.C. ch. 14B). However, to claim the deduction 
provided by section 243(a)(2) the company must file with its return a 
statement that it was a Federal licensee under the Small Business 
Investment Act of 1958 at the time of the receipt of the dividends.
    (iii) For a taxable year ending after December 31, 1963, an amount 
equal to 100 percent of the dividends received which are qualifying 
dividends, as defined in section 243(b) and Sec. 1.243-4.
    (3) To determine the amount of the distribution to a recipient 
corporation and the amount of the dividend, see Sec. Sec. 1.301-1 and 
1.316-1.
    (b) For limitation on the dividends received deduction, see section 
246 and the regulations thereunder.

[T.D. 6992, 34 FR 817, Jan. 18, 1969]