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ad-work [718]
1 year ago
14

If c corporations retain their after-tax earnings, when will their individual shareholders be taxed on the retained earnings?

Business
1 answer:
stepan [7]1 year ago
4 0

When will shareholders of C businesses that retain their post-tax profits be subject to individual income tax on those retained profits. When shareholders sell their shares for a profit, they must pay taxes.

C corporations will pay tax at a corporate rate of 21% as of the 2020 tax year (down from 35 percent in 2017). Then, dividends are taxed at the owner's personal marginal tax rate, which is up to 37%. (depending on the tax bracket).

Distributions of money or other assets to shareholders will lower the corporation's earnings and profits (E&P), but they won't affect its taxable income. Taxes are paid by the corporation on its taxable income and by the shareholders on any dividends they receive.

To learn more on Retained Earning

brainly.com/question/14529006

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Explanation:

 The contingency approach is one of the type of management theory that helps in understanding the various types of principles in an organization and it is also refers as the situational approach.

The main objective of the contingency approach is that it provide manager the different types of ways to give reaction on the given issue and different types of situation.

 According to the question, the contingency approach helps in providing the different types of effective ideas to the manager where they facing different types of problems in an organization.  

 Therefore, contingency approach is the correct answer.

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Non-cash items has to do with expense that does not involve paying cash.

Depreciation expense and amortization expense are non cash item as no cash payment is involve.

Although this expense may be included in a company profit or loss account or net income but they do not have effect on a company cash flow.

Non cash item like depreciation expenses and amortization expense often have effect on a company overall net income.

Inconclusion  depreciation expense and amortization expense represent non-cash items.

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