Which of the following statements is CORRECT?
A) Corporations are allowed to exclude 70% of their interest income from corporate taxes.
B) Corporations are allowed to exclude 70% of their dividend income from corporate taxes.
C) Individuals pay taxes on only 30% of the income realized from municipal bonds.
D) Individuals are allowed to exclude 70% of their interest income from their taxes.
E) Individuals are allowed to exclude 70% of their dividend income from their taxes.

Question

Quizplus · Accepted Answer

Statement a is false;corporations cannot exclude interest income from corporate taxes.Statement b is true because the 70% exclusion rule gets around the issue of triple taxation.Statements c,d,and e are false because individuals pay no taxes on municipal bond income,and individuals cannot exclude 70% of their income from either interest or dividends.

Which of the Following Statements Is CORRECT