A disadvantage of C corporations is that they are subject to ________, which means that a corporation is taxed on its net income and when the same income is distributed to shareholders in the form of dividends it is taxed again on shareholders' personal income tax returns.
A) double taxation
B) dual toll
C) double duty
D) double assessment
E) dual harm

Question

Quizplus · Accepted Answer

C corporations are subject to double taxation where they are taxed on their net income and when the same income is distributed to shareholders in the form of dividends, it is taxed again on shareholders' personal income tax returns. This can lead to a decrease in profits and dividends received by shareholders.

A Disadvantage of C Corporations Is That They Are Subject