14-24 what is the purpose of the dividends-received deduction? What corporations are entitled to claim this deduction? What dividends qualify for this deduction? A dividends received deduction is a specific term in US federal regulations on income tax. It refers to a deduction granted to a corporation to cover dividends received from another corporation that it partly owns. As a result, it is a rare example of a deduction applied to money that has been received by the taxpayer, rather than spent. The purpose of the dividends received deduction is to limit the effects the same money being taxed repeatedly. US policy does allow for double taxation, which is the circumstance by which a company's profits are taxed and then shareholders are taxed on the dividends they receive from the company's post-tax profits. Without the dividends received deduction, there would be an extra layer of taxation: tax would be taken from a corporation's profits, the dividend paid to a second corporation with an ownership stake in the first corporation, and the dividends paid by the second corporation to individual stockholders.
Source: http://www.wisegeek.com/what-is-a-dividends-received-deduction.htm
14-51What is the purpose of the reconciliation of taxable income with book income? Generally, Sec. 446 requires taxable income to be computed under the same method of accounting as the taxpayer uses for its books. However there are differences in the accounting method used for GAAP versus tax....this could be cash method vs. accrual method, depreciation methods, expenses disallowed for tax but recorded in books and so on. Reconciliation of taxable income to book helps to quantify how much of the aggregate book-tax differences are due to differing rules for grouping entities for book and tax purposes. It helps to identify the effects of permanent and temporary accounting differences,