What tax liability is created by a corporation in the 35% tax bracket that receives $50,000 in preferred stock dividends?
A) $0
B) $5,250
C) $12,250
D) $17,500

Question

Quizplus · Accepted Answer

The tax liability on preferred stock dividends for a corporation in the 35% tax bracket is 10%, which is $5,000. Therefore, the total tax liability will be $5,250 ($5,000 + 35%*($50,000-$5,000)). The correct choice is B.

What Tax Liability Is Created by a Corporation in the 35