Which of the following is not a characteristic of a C corporation?
A) Must be formed under state law
B) Distributions of entity income are tax-free
C) Loss is recognized on entity liquidation
D) Owners' salaries are subject to FICA taxes.

Question

Quizplus · Accepted Answer

Distributions of entity income from a C corporation are not tax-free; they are typically taxed twice: first at the corporate level when the income is earned and again at the individual level when income is distributed as dividends.

Which of the Following Is Not a Characteristic of a C