Alaska 80% DRD for dividends received from 80 20 company

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September 2017

Overview

An Administrative Law Judge (ALJ) with the Alaska Office of Administrative Hearings concluded that a taxpayer is only entitled to a dividends received deduction (DRD) for 80% of dividends received from a domestic corporation that is not included in the taxpayer’s Alaska combined report. Alaska provides a 100% DRD for dividends received from a member included in the same combined report and an 80% DRD for dividends received from a foreign entity excluded from the combined report.  Among the ALJ’s determinations, the ALJ reasoned that taxation of a dividend paid by a domestic subsidiary excluded from the combined report should be the same as the taxation of a dividend paid by a foreign subsidiary excluded from the combined report.

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Peter Michalowski

Peter Michalowski

State and Local Tax Leader, PwC US

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