Jake, the sole shareholder of Peach Corporation, a C corporation, has the corporation pay him $100,000. For income tax purposes, Jake would prefer to have the payment treated as dividend instead of salary.

Question

Quizplus · Accepted Answer

A distribution from a C corporation to its shareholder is generally treated as a dividend, regardless of how the corporation characterizes the payment.

Jake, the Sole Shareholder of Peach Corporation, a C Corporation