Question

Which of the following are attributes of a Subchapter S corporation? The corporation pays income taxes...

Which of the following are attributes of a Subchapter S corporation?

The corporation pays income taxes on all corporate income.

The corporation has the double toxation probiem.

None of the other answers are correct

When the carporation distributes dividends,income taxes are pald at the sharehclder's rate.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

None of the other answers are correct

An S corporation, for United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes.

Double taxation to corporate shareholders is a result of the corporation paying income taxes, then the shareholders paying income taxes on the dividends they receive. Since an S corporation does not pay income taxes as a business entity, the owners can avoid the double taxation issue.

An S corporation does not have retained earnings in the traditional sense and does not distribute dividends, since dividends are paid out of after-tax profits and the S corporation does not pay taxes.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Corporation A owns 10% of Corporation C. The marginal tax rate on non-dividend income for both...
Corporation A owns 10% of Corporation C. The marginal tax rate on non-dividend income for both A and C is 21%. Corporation C earns a total of $200200000 before taxes in the current year, pays corporate tax on this income and distributes the remainder proportionately to its shareholders as a dividend. In addition, Corporation A owns 40% of partnership P that earns $500200000 in the current year. Given this fact pattern, answer the following questions: a. How much cash from...
S Corporation elected S corporation status beginning in 2010 and will have Subchapter C earnings and...
S Corporation elected S corporation status beginning in 2010 and will have Subchapter C earnings and profits at the close of the current taxable year. This year, S expects that its business operations and investments will produce the following tax results: Gross income from operations - $75,000 Business deductions - $60,000 Tax-exempt interest - $23,000 Dividends - $12,000 Long-term capital gain from the sale of investment real property - $35,000 (a) Is S Corporation subject to the Section 1375 tax...
Post Corporation, an S corporation with prior year Subchapter C earnings and profits, has for its...
Post Corporation, an S corporation with prior year Subchapter C earnings and profits, has for its current taxable year total gross receipts of $500,000, including passive investment income of $300,000, $220,000 of which is interest income. Post also has expenses directly connected with the production of this interest income in the amount of $50,000. What is Post’s tax on excess net passive income? $ 51,042 $ 61,250 $ 36,458 $ 69,602
A C corporation earns $ 8.30 per share before taxes and the company pays a dividend...
A C corporation earns $ 8.30 per share before taxes and the company pays a dividend of$ 5.00 per share. The corporate tax rate is​ 39%, the personal tax rate on dividends is​ 15%, and the personal tax rate on​ non-dividend income is​ 36%. What is the​ after-tax amount an individual would receive from the​ dividend?
Suppose you invest $100,000 in a S corporation for 10 years. You expect the corporation to...
Suppose you invest $100,000 in a S corporation for 10 years. You expect the corporation to earn 8% pa before any corporate taxes and any investor level taxes.  The firm does not plan to pay any dividends over the 10 year period. You currently face a 40% tax rate on ordinary income, and 20% tax rate on capital gains.  The corporation faces a tax rate of 35%.  The tax rates are not expected to change. What is your after-tax dollar accumulation at the...
Mike Corporation, which owns stock in Red Corporation, had net operating income of $125,000 for the...
Mike Corporation, which owns stock in Red Corporation, had net operating income of $125,000 for the year. Red pays Mike a dividend of $100,000. Mike takes a dividends received deduction of $80,000. Which of the following statements is correct? a. Pearl owns less than 20% of Opal Corporation. b. None of the above c. Pearl owns more than 80% of Opal Corporation. d. Pearl owns 20% or more, but less than 80% of Opal Corporation.
Consider a C corporation. The corporation earns $1 per share before taxes. After the corporation has...
Consider a C corporation. The corporation earns $1 per share before taxes. After the corporation has paid its corresponding taxes, it will distribute 0% of its earnings to its shareholders as a dividend. The corporate tax rate is 35%, the tax rate on dividend income is 28%, and the personal income tax rate is set at 28%. What are the shareholder's earnings from the corporation after all corresponding taxes are paid? Note: Express your answers in strictly numerical terms. For...
QUESTION 3 "Consider a C corporation. The corporation earns $1 per share before taxes. After the...
QUESTION 3 "Consider a C corporation. The corporation earns $1 per share before taxes. After the corporation has paid its corresponding taxes, it will distribute 30% of its earnings to its shareholders as a dividend. The corporate tax rate is 35%, the tax rate on dividend income is 28%, and the personal income tax rate is set at 28%. What are the shareholder's earnings from the corporation after all corresponding taxes are paid? Note: Express your answers in strictly numerical...
Which of the following is not an adjustment to an S corporation shareholder's stock basis? Multiple...
Which of the following is not an adjustment to an S corporation shareholder's stock basis? Multiple Choice Increase for any contributions to the S corporation during the year. Increase for shareholder's share of ordinary business income. Decrease for shareholder's share of nondeductible items. Increase for distributions during the year. None of the choices are correct.
True and False. Explain all false answers. 1. Subchapter S refers to the " Partners and...
True and False. Explain all false answers. 1. Subchapter S refers to the " Partners and Partnership" Section of the Internal Revenue Code. 2. A court generally will hold a legislative regulation to be invalid if warranted. 3. The IRS responds to a taxpayer request concerning the tax treatment of a completed transaction in a letter ruling. 4. The head of the IRS opertions is the chief. 5. Recently, the overall Federal income tax audit rate for individual returns has...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT