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To: qgambit who wrote (172446)	1/10/2003 12:06:59 AM
From: The Duke of URL©	Respond to of 186894

I am sorry I wasn't more clear. When I said I was surprised that the elimination did not come at the corporate level, I meant the corporation who is paying the dividend was not going to be given a dividends paid deduction, to make it exactly equal to interest which a corporation pays and is currently deductible. The Corp Dividends Received Exclusion which has been in the tax law for at least 70 years is different in rationale. The theory is that since the money remains in "corporate solution" it will eventually be double taxed when it is distributed from the second corporation. That is why the second corporation is given the exclusion. A preferred stock cash dividend is treated the same under the current law as a common stock cash dividend.