1120-US: Limiting the dividends received deduction (FAQ)

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Question

Why is UltraTax CS not limiting the dividends received deduction (1120)?

Answer

Per the instructions for Schedule C, line 9, column (c): "Generally, line 9, column (c) may not exceed the amount from the worksheet below. However, in a year in which an NOL occurs, this limitation does not apply even if the loss is created by the dividends-received deduction. See sections 172(d) and 246(b)." If the DRD actually creates an NOL, the dividends-received deduction is not limited. Note that when necessary, UltraTax/1120 calculates the DRD worksheet mentioned in the instructions.

Related topic: 1120 frequently asked questions