Which of the following statements is true?
A) Only 20 percent of interest income is taxable for a corporation.
B) Dividend income is fully taxable.
C) Interest paid on debt obligations is a tax-deductible business expense.
D) Dividends paid to stockholders are a tax-deductible business expense.

Question

Quizplus · Accepted Answer

Interest paid on debt obligations is considered a business expense and is therefore tax-deductible. A) is false because corporations are taxed on all interest income. B) is partially false because dividend income is taxable, but there are some dividends that may receive reduced tax rates. D) is false because dividends paid to stockholders are not considered a business expense and are therefore not tax-deductible.

Which of the Following Statements Is True