Asked by Jackeline Nunez Salgado on Jun 09, 2024
Verified
Double taxation is a disadvantage of the ___________ type of business firm.
A) partnership
B) proprietorship
C) corporate
D) farm
Double Taxation
The incidence where income is taxed twice; this usually occurs when income is taxed at both the corporate level and personal level.
Corporate
Pertaining to corporations, large companies recognized by law as single entities distinct from their owners, with legal rights and responsibilities.
- Discriminate among the characteristics and distinctions of corporations, partnerships, and sole proprietorships as business structures.
Verified Answer
RW
Rosemaire WynterJun 11, 2024
Final Answer :
C
Explanation :
Corporate type of business firms are subject to double taxation where the profits of the corporation are taxed at the corporate level and then again at the individual level when they are distributed to the shareholders as dividends. This is not the case for partnerships and proprietorships where the profits are only taxed once at the individual level. Farms do not necessarily fall under a specific type of business structure and can be structured as partnerships, corporations, or proprietorships.
Learning Objectives
- Discriminate among the characteristics and distinctions of corporations, partnerships, and sole proprietorships as business structures.