Drake Tax – 1120: Dividends

Article #: 10073

Last Updated: October 21, 2024

 

Tags: Drake Tax

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Data Entry

Enter dividends received by the corporation, as well as special deductions, on screen C.

The Dividends Received Deduction Worksheet (Wks DRD) is produced based off data entered in fields 3-1, 3-2, 3-3, and 3-4. The result of the Wks DRD is carried to Schedule C, line 3.

The total from Schedule C, line 23, column A is carried to Form 1120, line 4 ("Dividends"), and the total from Schedule C, line 24, column C is carried to Form 1120, line 29b ("Special deductions").

Important  If the corporation is filing a consolidated return, do not enter non-included dividends here or anywhere else in the program.

Enter dividends paid by a corporation on screen DED using the Other deductions (itemize) field. Review the guidelines for deducting dividends paid in the 1120 Instructions:

"Dividends paid in cash on stock held by an employee stock ownership plan. However, a deduction may be taken for these dividends only if, according to the plan, the dividends are:

  1. Paid in cash directly to the plan participants or beneficiaries;

  2. Paid to the plan, which distributes them in cash to the plan participants or their beneficiaries no later than 90 days after the end of the plan year in which the dividends are paid;

  3. At the election of such participants or their beneficiaries (a) payable as provided under (1) or (2) above, or (b) paid to the plan and reinvested in qualifying employer securities; or

  4. Used to make payments on a loan described in section 404(a)(9).

See section 404(k) for more details and the limitation on certain dividends."

Resources

For more information, see: