A bill to amend the Internal Revenue Code of 1986 to limit the interest deduction allowed corporations and to allow a deduction for dividends paid by corporations.

Summary

Amends the Internal Revenue Code to reduce the deduction for corporate interest payments by 20 percent. Excepts small corporations and farming businesses from such reduction. Allows corporations a deduction of 50 percent of the dividends paid during a taxable year. Limits such deduction to the amount in the qualified dividend account established by the corporation for the payment of such dividends. Prohibits the following corporations from using such deduction: (1) regulated investment companies; (2) real estate investment trusts; (3) an S corporation (certain small business corporations); (4) cooperative organizations; and (5) foreign sales corporations and domestic international sales corporations. Provides for an increase in the withholding tax on dividends paid to nonresident aliens or foreign corporations to reflect the dividend paid deduction. Requires, in the case of the acquisition of assets of a corporation by another corporation, that the acquiring corporation carryover the qualified dividend account.

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Documents

3 official files

• Introduced in Senate (text)

  Introduced in Senate · EN · 6 April 1995

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• Introduced in Senate (PDF)

  Introduced in Senate · EN · 6 April 1995

  ViewDownloadOpen at official source

• Introduced in Senate

  summary · EN · 6 April 1995

  Open at official source

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