Asked by Kierra Lewis on May 05, 2024
Verified
An S corporation avoids taxes at
A) none of the choices.
B) the market level.
C) the corporate level.
D) the shareholder level.
S Corporation
A close business corporation that has most of the attributes of a corporation, including limited liability, but qualifies under the Internal Revenue Code to be taxed as a partnership.
Taxes
Mandatory financial charges or levies imposed by a government on individuals, corporations, or other legal entities to fund public expenditures.
- Understand the differences between various business structures, such as Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs), S corporations, and benefit corporations.
Verified Answer
TL
Thalia LawrenceMay 11, 2024
Final Answer :
C
Explanation :
S corporations are designed to avoid the double taxation that typically occurs with traditional C corporations, where income is taxed at both the corporate level and again when distributed as dividends to shareholders. Instead, S corporation profits and losses are passed through directly to the shareholders' personal tax returns, avoiding corporate income tax.
Learning Objectives
- Understand the differences between various business structures, such as Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs), S corporations, and benefit corporations.