The income generated by S corporations
A) passes through to its owners, and each is taxed individually for this income.
B) is provided to nonprofit organizations, so it is considered a tax-free source of funds.
C) is taxed separately from its owners.
D) must be reinvested in the business. Owners should not expect dividends.

Question

Quizplus · Accepted Answer

The income generated by S corporations passes through to its owners, and each owner is taxed individually for this income on their personal income tax return. This is known as "pass-through taxation."

The Income Generated by S Corporations