In which form of business organization is the taxation effects characterized by the income flowing to shareholders taxed at personal tax rates?
A)proprietorship
B)limited partnership
C)corporation
D)subchapter S corporation

Question

Quizplus · Accepted Answer

Subchapter S corporations, also known as S corps, are a special type of corporation that allows for pass-through taxation. This means that the income earned by the corporation is not taxed at the corporate level, but instead flows through to the shareholders and is taxed at their personal tax rates. This is similar to how a partnership is taxed. Proprietorships and limited partnerships are not corporations and may be subject to different taxation rules. Traditional corporations, also known as C corps, are subject to double taxation, meaning the corporation's income is taxed at the corporate level and then again when distributed to shareholders as dividends.

In Which Form of Business Organization Is the Taxation Effects