Question

Corporations, as a separate legal entity, are subject to corporate taxes. Additionally, the stockholders in corporations are subjected to income taxes on the sale of stocks and income from dividends. This peculiar tax situation that corporations face is called

A) "flat tax."
B) "double taxation."
C) "itemized deductions."
D) "progressive income tax."

Answer 1

Answer: B) "double taxation."

Explanation: Because corporations are subject to both a special corporate income tax in addition to the income taxes paid by the owners of the corporation (the stockholders), this is considered "double taxation".

Answer 2

B. double taxation.

Step-by-step explanation:

Double taxation refers to the income tax paid by the person twice for the same source of income. It is widely famous for the international trading system for the investment in two countries.

The stockholders in corporations are subjected to income taxes on the sale of stocks and income from dividends in a corporation, in this situation the corporation is experiencing the double taxation system.

First the tax is paid on corporate system then again tax is deducted when it is provided to the stakeholders.