Earnings of C corporations can be
A) taxed twice if they are distributed as dividends to stockholders.
B) taxed at twice the going rate of a partnership or sole proprietorship.
C) taxed by the federal government, but they are exempt from state taxes if the corporation owns any facilities within that state.
D) taxed the same as a partnership.

Question

Quizplus · Accepted Answer

Corporations must pay taxes on income before it is distributed to stockholders; then the stockholders must pay taxes on the income they receive from dividends. Dividend income ends up being taxed twice-once when it was part of the total net income of the company and then again when it is part of the owner/stockholder's personal income.

Earnings of C Corporations Can Be