Which of the following forms of earnings distributions would not be subject to double taxation at the corporate and shareholder level?

Question

Quizplus · Accepted Answer

Compensation paid to a shareholder/employee of the corporation is not subject to double taxation because it is treated as a deductible expense for the corporation and taxable income for the shareholder/employee. The other options (partial liquidation, dividend, and stock redemption) all involve a distribution of earnings to shareholders, which can result in double taxation at both the corporate and shareholder level.

Which of the Following Forms of Earnings Distributions Would Not