Get Form 973 (rev. May 1998). Corporation Claim For Deduction For Consent Dividends

The dividend must be from a corporation that's not a real estate investment trust (REIT) or a company exempt from taxation under section 501 or 521 of the Internal Revenue Code. It also can't be a capital gain dividend from a regulated investment company. The dividend must be paid by a U.S. corporation.

To report your dividends on your tax return and pay the applicable taxes, you include the appropriate amounts on Form 1040 and fill out the related line items on Schedule B if required. TurboTax can fill out the proper forms for you by asking questions about dividends you receive throughout the tax year.

Purpose of form. Form 972 is used by a shareholder who agrees to report a consent dividend as taxable income in the form of a dividend on the shareholder's own tax return even though the shareholder receives no actual cash distribution of the consented amounts.

To qualify for the 100-percent dividends-received deduction, a dividend must be distributed out of the earnings and profits of the distributing corporation or a predecessor corporations for a tax year during each day of which the paying and receiving corporation were members of the same affiliated group (Reg.

Purpose of form. Form 972 is used by a shareholder who agrees to report a consent dividend as taxable income in the form of a dividend on the shareholder's own tax return even though the shareholder receives no actual cash distribution of the consented amounts.

Section 1.565 - 1(c)(2) of the regulations provides, in part, that the full amounts specified on a consent will be taxable to the shareholder even though a consent dividend deduction may be denied to the corporation because it is determined that it is not a corporation subject to part I, II or III, subchapter G, ...

PHC tax uses the consent dividend as a determination of the​ corporation's liability and thereby lowering​ it's liability, however the accumulated earnings tax is not a tax you plan to​ pay, so distributing consent dividends is not a factor in avoiding this tax.

Section 1.565 - 1(c)(2) of the regulations provides, in part, that the full amounts specified on a consent will be taxable to the shareholder even though a consent dividend deduction may be denied to the corporation because it is determined that it is not a corporation subject to part I, II or III, subchapter G, ...