The income of a corporation is taxed twice,first as corporate income and then as personal income to shareholders who receive cash dividends.

Question

Quizplus · Accepted Answer

This is true. When a corporation earns income, it is taxed at the corporate level. If the corporation then distributes the income to its shareholders as cash dividends, those dividends are also subject to personal income tax for the individual shareholders. This is often referred to as double taxation.

The Income of a Corporation Is Taxed Twice,first as Corporate