Asked by Adney Guerrero on May 09, 2024
Verified
Double taxation is a disadvantage of a corporation because the corporation has to pay income taxes at twice the rate applied to partnerships.
Double Taxation
The taxation of the same income or financial transaction at two different levels, such as corporate profits and then again as dividends to shareholders.
Corporation
A corporation is a legal entity that is separate and distinct from its owners, offering limited liability protection to its shareholders, and is capable of owning property, entering into contracts, and being taxed.
Income Taxes
Taxes imposed by the government on the income earned by individuals and corporations.
- Understand the implications of double taxation on corporations.
Verified Answer
QB
Quajulen BurgessMay 16, 2024
Final Answer :
False
Explanation :
Double taxation refers to the fact that corporate income is taxed at the corporate level and again at the individual level on dividends, not at twice the rate of partnerships.
Learning Objectives
- Understand the implications of double taxation on corporations.