§561 — Definition of deduction for dividends paid

31 cases·3 followed·28 cited—10% support

Statute Text — 26 U.S.C. §561

(a)General rule

The deduction for dividends paid shall be the sum of—

(1)

the dividends paid during the taxable year,

(2)

the consent dividends for the taxable year (determined under section 565), and

(3)

in the case of a personal holding company, the dividend carryover described in section 564.

(b)Special rules applicable

In determining the deduction for dividends paid, the rules provided in section 562 (relating to rules applicable in determining dividends eligible for dividends paid deduction) and section 563 (relating to dividends paid after the close of the taxable year) shall be applicable.

Treasury Regulations

Treas. Reg. §Treas. Reg. §1.561-1 Deduction for dividends paid
Treas. Reg. §Treas. Reg. §1.561-1(a) The deduction for dividends paid is applicable in determining accumulated taxable income under section 535, undistributed personal holding company income under section 545, undistributed foreign personal holding company income under section 556, investment company taxable income under section 852, and real estate investment trust taxable income under section 857.
Treas. Reg. §Treas. Reg. §1.561-1(b) For dividends for which the dividends paid deduction is allowable, see section 562 and § 1.
Treas. Reg. §Treas. Reg. §1.561-2 When dividends are considered paid
Treas. Reg. §Treas. Reg. §1.561-2(a) In general.
Treas. Reg. §Treas. Reg. §1.561-2(b) Methods of accounting.
Treas. Reg. §Treas. Reg. §1.561-2(c) Records.

31 Citing Cases

Ralston Purina Company and Subsidiaries, Petitioner 131 T.C. No. 4 · 2008

tion 404(k), their deduction should be disallowed as evasions of taxation under section 404(k)(5); and (3) even if the redemption dividends are otherwise allowable as deductions under section 404(k), they are disallowed as amounts paid by a corporation in connection with the redemption of its stock within the meaning of section 162(k).

Ralston Purina Co. & Subsidiaries v. Commissioner 131 T.C. 29 · 2008

th the redemption of its stock. (2) Exceptions. — Paragraph (1) shall not apply to— (A) Certain specific deductions. — Any— (i) deduction allowable under section 163 (relating to interest), or (ii) deduction for dividends paid (within the meaning of section 561). (B) Stock of certain regulated investment companies. — Any amount paid or incurred in connection with the redemption of any stock in a regulated investment company which issues only stock which is redeemable upon the demand of the share

Fort Howard Corporation and Subsidiaries, Petitioner 107 T.C. No. 12 · 1996

2(...continued) paid (within the meaning of section 561).

Robert G. Mussman and Estate of Myrtis Mussman, Deceased; Robert G. Mussman, Executor, Petitioners T.C. Memo. 1996-168 · 1996

Section 535(a) defines "accumulated taxable income" (the recomputed taxable income of the corporation against which tax under section 531 is imposed) as the taxable income of the corporation, as adjusted in section 535(b), less the dividend- - 51 - paid deduction (as defined in section 561) and the accumulated earnings credit (as defined in section 535(c)).

Northwestern Indiana Telephone Company, Petitioner T.C. Memo. 1996-168 · 1996

Fort Howard Corp. v. Commissioner 107 T.C. 187 · 1996

(i) deduction allowable under section 163 (relating to interest), (ii) deduction for amounts which are properly allocable to indebtedness and amortized over the term of such indebtedness, or (iii) deduction for dividends paid (within the meaning of section 561). (B) Stock of certain regulated investment COMPANIES. — Any amount paid or incurred in connection with the redemption of any stock in a regulated investment company which issues only stock which is redeemable upon the demand of the shareh

Fort Howard Corp. v. Commissioner 103 T.C. 345 · 1994

the redemption of its stock. (2) Exceptions. — Paragraph (1) shall not apply to — • (A) Certain specific deductions. — Any— (i) deduction allowable under section 163 (relating to interest), or (ii) deduction for dividends paid (within the meaning of section 561). (B) Stock of certain regulated investment companies. — Any amount paid or incurred in connection with the redemption of any stock in a regulated investment company which issues only stock which is redeemable upon the demand of the share

Estate of Lucas v. Commissioner 71 T.C. 838 · 1979

Nestlé Purina Petcare Co. v. Commissioner 594 F.3d 968 · Cir.

Nestle Purina Petcare Co. v. CIR · Cir.

Frederick Weisman Co. v. Commissioner 97 T.C. 563 · 1991

Estate of Watson v. Commissioner 94 T.C. 262 · 1990

Rod Warren Ink v. Commissioner 92 T.C. 995 · 1989

Chaney & Hope, Inc. v. Commissioner 80 T.C. 263 · 1983

Thompson Engineering Co. v. Commissioner 80 T.C. 672 · 1983

Mariani Frozen Foods, Inc. v. Commissioner 81 T.C. 448 · 1983

Gottesman & Co. v. Commissioner 77 T.C. 1149 · 1981

Doug-Long, Inc. v. Commissioner 73 T.C. 71 · 1979

C. Blake McDowell, Inc. v. Commissioner 67 T.C. 1043 · 1977

L. C. Bohart Plumbing & Heating Co. v. Commissioner 64 T.C. 602 · 1975

GPD, Inc. v. Commissioner 60 T.C. 480 · 1973

Estate of Whitlock v. Commissioner 59 T.C. 490 · 1972

Grove v. Commissioners 54 T.C. 799 · 1970

Montgomery Co. v. Commissioner 54 T.C. 986 · 1970

Callan v. Commissioner 54 T.C. 1514 · 1970

Jos. K., Inc. v. Commissioner 51 T.C. 584 · 1969

Novelart Manufacturing Co. v. Commissioner 52 T.C. 794 · 1969

John P. Scripps Newspapers v. Commissioner 44 T.C. 453 · 1965

Bremerton Sun Publishing Co. v. Commissioner 44 T.C. 566 · 1965

I. A. Dress Co. v. Commissioner 32 T.C. 93 · 1959

United States v. Atilla 966 F.3d 118 · Cir.

§561 — Definition of deduction for dividends paid

31 Citing Cases

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