### Question
How is the term qualifying dividend defined?


### Answer
The term **qualifying dividend** is defined in *26 U.S.C. § 243* as the following:

> any dividend received by a corporation—


(A) if at the close of the day on which such dividend is received, such corporation is a member of the same affiliated group as the corporation distributing such dividend, and


(B) if—


(i) such dividend is distributed out of the earnings and profits of a taxable year of the distributing corporation which ends after December 31, 1963, for which an election under section 1562 was not in effect, and on each day of which the distributing corporation and the corporation receiving the dividend were members of such affiliated group, or


(ii) such dividend is paid by a corporation with respect to which an election under section 936 is in effect for the taxable year in which such dividend is paid

#### Citation:
  - *26 U.S.C. § 243*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART VIII-SPECIAL DEDUCTIONS FOR CORPORATIONS**

