### Question
How does the law define applicable dividend?


### Answer
Under *26 U.S.C. § 904*, **applicable dividend** is defined as:

> any dividend—


(i) from a noncontrolled section 902 corporation with respect to the taxpayer, and


(ii) paid out of earnings and profits accumulated in taxable years beginning after December 31, 2002

#### Citation:
  - *26 U.S.C. § 904*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter N-Tax Based on Income From Sources Within or Without the United States > PART III-INCOME FROM SOURCES WITHOUT THE UNITED STATES > Subpart A-Foreign Tax Credit**

