Asked by nathi ngcobo on May 07, 2024
Verified
The S-corporation was designed to address the concerns of shareholders of large, publicly traded companies that wanted to avoid the double taxation of their income.
S-corporation
A special type of corporation in the U.S. that allows profits, and some losses, to be passed directly to owners’ personal income without being subject to corporate tax rates.
Double Taxation
The levying of tax by two or more jurisdictions on the same declared income, asset, or financial transaction.
- Understand the tax consequences associated with various corporate formations.
Verified Answer
RK
Rohtash KumarMay 09, 2024
Final Answer :
False
Explanation :
The S-corporation was designed primarily for small to medium-sized businesses, allowing them to enjoy the benefits of incorporation while being taxed similarly to a partnership or sole proprietorship, thus avoiding the double taxation that C-corporations face.
Learning Objectives
- Understand the tax consequences associated with various corporate formations.
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