Which of the following statements regarding the tax burden imposed on business entities is true?
A)The tax burden imposed on corporate earnings is always lower if the corporation makes an S election.
B)Business owners desiring current cash flow can maximize annual after-tax cash flow by operating as a regular corporation.
C)Current tax cost associated with shareholder cash flow received as dividends may be lower than cash flow received as payments of salary,interest,or rental income.
D)All of the above statements are true.

Question

Quizplus · Accepted Answer

Dividends may be taxed at a lower rate than ordinary income, such as salary or interest, due to preferential tax treatment for qualified dividends.

Which of the Following Statements Regarding the Tax Burden Imposed