Dividends paid from E&P are taxable to shareholders and are,therefore,deductible by the corporation.

Name: Dividends paid from E&P are taxable to shareholders and are,therefore,deductible by the corporation.
Brand: Quizplus
Rating: 4.8 (48 reviews)

Question

Quizplus · Accepted Answer

Dividends paid from E&P (earnings and profits) are not deductible by the corporation because they represent a distribution of the corporation's after-tax income. However, they are taxable to shareholders as either qualified or non-qualified dividends, depending on various factors.

Dividends Paid from E&P Are Taxable to Shareholders and Are,therefore,deductible