7. Which statement best describes the concept of the \"double taxation\" of corp

Question

7. Which statement best describes the concept of the "double taxation" of corporation income?

Multiple Choice

A. Corporate income is subject to two levels of taxation: the regular tax and the alternative minimum tax.

B. Corporate income is taxed twice at the corporate level: first when earned and then a second time if appreciated property is distributed to a shareholder.

C. Corporated income is taxed when earned by a C corporation and then a second time at the shreholder level when distrubuted as a dividend.

D. Corporate income is subject to two levels of taxation: at the federal level and a second time at hte state level.

Explanation / Answer

Answer: C. Corporated income is taxed when earned by a C corporation and then a second time at the shreholder level when distrubuted as a dividend.

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