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T of F? The S corporation rules were enacted to allow small corporations to enjoy the...

T of F?

The S corporation rules were enacted to allow small corporations to enjoy the nontax advantages of the corporate form of business without being subject to the tax disadvantage of double taxation.

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Answer #1

Answer-----True

As we know that in case of C corporation , companies pay federal tax and then shareholders need to pay individual taxes too which creates a situation of double taxation.

Although in S corporation income of company is pass through shareholder s since all income is distributed to shareholders and those shareholders show that income in their individual tax returns. So its true that he S corporation rules were enacted to allow small corporations to enjoy the nontax advantages of the corporate form of business without being subject to the tax disadvantage of double taxation.

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