Question

Which of the following describes the difference between S corporation taxation and C corporation taxation? There...

Which of the following describes the difference between S corporation taxation and C corporation taxation?

There is no difference.

The shareholders of an S corporation are taxed on the entity level earnings whereas the shareholders of a C corporation are not taxed on the entity level earnings.

The shareholders of an C corporation are taxed on the entity level earnings whereas the shareholders of a S corporation are not taxed on the entity level earnings.

None of the alternatives are correct.

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Answer #1

The correct option is The shareholders of an C corporation are taxed on the entity level earnings whereas the shareholders of a S corporation are not taxed on the entity level earnings.

The S Level corporation are not entitled to pay the taxes on the entity level as they show the income on the personal basis while the C level corporation have to show their earnings on the entity level and they have to pay the taxes which are imposed on the Corporate entity.

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