Indiana § 6-3-2-12 - Foreign source dividends; deduction; computation

§ 6-3-2-12. Foreign source dividends; deduction; computation

Sec. 12. (a) As used in this section, the term "foreign source dividend" means a dividend from a foreign corporation. The term:

(1) includes any amount that a taxpayer is required to include in its gross income for a taxable year under Sections 951 and 951A of the Internal Revenue Code, and, for taxable years beginning after December 25, 2016, any amounts required to be included in adjusted gross income under this article after application of IC 6-3-1-3.5(b)(13), IC 6-3-1-3.5(d)(12), and IC 6-3-1-3.5(e)(12), but prior to application of this section; and

(2) does not include any amount that is treated as a dividend under Section 78 of the Internal Revenue Code.

The reference in subdivision (1) to amounts required to be included in adjusted gross income under this article after application of IC 6-3-1-3.5(b)(13), IC 6-3-1-3.5(d)(12), and IC 6-3-1-3.5(e)(12) applies in the same taxable year that the taxpayer takes into account the increase in Subpart F income as a result of Section 965(a) of the Internal Revenue Code and uses the deduction for deferred foreign income under Section 965(c) of the Internal Revenue Code.

(b) A corporation that includes any foreign source dividend in its adjusted gross income for a taxable year is entitled to a deduction from that adjusted gross income. The amount of the deduction equals the product of:

(1) the amount of the foreign source dividend included in the corporation's adjusted gross income for the taxable year; multiplied by

(2) the percentage prescribed in subsection (c), (d), or (e), as the case may be.

(c) The percentage referred to in subsection (b)(2) is one hundred percent (100%) if the corporation that includes the foreign source dividend in its adjusted gross income owns stock possessing at least eighty percent (80%) of the total combined voting power of all classes of stock of the foreign corporation from which the dividend is derived.

(d) The percentage referred to in subsection (b)(2) is eighty-five percent (85%) if the corporation that includes the foreign source dividend in its adjusted gross income owns stock possessing at least fifty percent (50%) but less than eighty percent (80%) of the total combined voting power of all classes of stock of the foreign corporation from which the dividend is derived.

(e) The percentage referred to in subsection (b)(2) is fifty percent (50%) if the corporation that includes the foreign source dividend in its adjusted gross income owns stock possessing less than fifty percent (50%) of the total combined voting power of all classes of stock of the foreign corporation from which the dividend is derived.

As added by P.L.383-1987(ss), SEC.4. Amended by P.L.214-2018(ss), SEC.8.