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stira [4]
3 years ago
14

Which of the following statements is true regarding c corporation dividend distributions?

Business
1 answer:
mel-nik [20]3 years ago
4 0

<u>Answer: </u>

C corporation dividend distributions are taxed first at the time they are calculated at the entity level and then also taxed at the individual shareholder level.

Option: (D)

<u>Explanation: </u>

  • When the dividend is at the entity level, it is deemed to be as the profit gained by the corporation.
  • Hence, the corporation is bound to pay the corporate income tax of 21% on the entire amount of dividends.
  • Once the dividend is distributed among the shareholders after initial taxation, it becomes income for the shareholders. Thus, shareholders also need to pay the income tax.
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