Explain the significance of the dividends received deduction

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Problem

You are the controller for XYZ Company, a publicly traded corporation. You have just prepared the corporation's income tax return, and return shows an overpayment of 373,280.

The members of the board of directors, none of whom have an accounting or tax background, have some specific question about certain deductions that the corporation claimed on its return.

Required: Prepare a one page memorandum explaining the significance of the following deductions:

• The Dividends Received Deduction (Form 1120, line 29b)
• The Domestic Production Activities Deduction ( 1120, line 25)
• The Net Operating loss Deduction ( Form 1120, Line 29a)

Reference no: EM131784703

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