Dividend

Dividend means:
a payment by a corporation to shareholders, taxable as ordinary income, for which most corporations receive no deduction. However, some investor-owned public utilities are entitled to a limited deduction for dividends paid on certain preferred stock. Such amount may be taxed to the shareholder as ordinary income (to the extent of current and accumulated earnings and profits) or capital gain (to the extent of stock basis), or the amount may be treated as a return of capital (i.e., not taxed). A dividend distribution is quite important in determining the penalty surtaxes imposed on personal holding companies and corporations that accumulate income beyond the reasonable needs of the business, since such a distribution reduces the amount subject to the penalty tax. Former IRC (check if this IRC provision is current here) §316 and 6042(b).

See Dividend in the American Legal Encyclopedia and Dividend in the World Legal Encyclopedia.

U.S. and other Developed Countries International Tax Meaning

DIVIDENDS – A payment by a corporation to shareholders, which is taxable income of shareholders. Most corporations receive no deduction for it.

International Tax Law.