### Question
What is the definition of applicable dividend?


### Answer
The definition of **applicable dividend** is as follows in *26 U.S.C. § 404*:

> any dividend which, in accordance with the plan provisions—


(i) is paid in cash to the participants in the plan or their beneficiaries,


(ii) is paid to the plan and is distributed in cash to participants in the plan or their beneficiaries not later than 90 days after the close of the plan year in which paid, or


(iii) is used to make payments on a loan described in subsection (a)(9) the proceeds of which were used to acquire the employer securities (whether or not allocated to participants) with respect to which the dividend is paid

#### Citation:
  - *26 U.S.C. § 404*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter D-Deferred Compensation, Etc. > PART I-PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC. > Subpart A-General Rule**

