a. Because all activities of a corporation are considered to be business activities, a corporation cannot have a nonbusiness bad debt.
b. The proprietorship, partnership, and S corporation pass through to individuals, partners, and shareholders all items of income, deduction, gain, loss, or credit for Federal income tax purposes.
c. Unlike individuals, a corporation’s charitable deduction is limited to 10% of taxable income figured before certain deductions.
d. A corporation is allowed to deduct 50% of dividends paid to shareholders provided that it is a taxable domestic corporation.
Answer: Option d) A corporation is allowed to deduct 50% of dividends paid to shareholders provided that it is a taxable domestic corporation.
A domestic corporation is a company that conducts taxable affairs in its home country. A domestic business is often taxed differently than a non-domestic business and may be required to pay fees on the products it imports.
Companies also may be referred to as foreign businesses when thy are outside of the state in which they were formed.
A corporation is a legal entity that is separate and distinct from its owners.
A corporation is allowed to deduct more than 50% of dividends paid to shareholders provided that it is a taxable domestic corporation.
Thus, option d) is correct and remaining options are incorrect.
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