The Subchapter S Corporation: A Solution to Double Taxation

One of the negative aspects of the corporate form of doing business is double taxation, which occurs when a corporation pays dividends to shareholders from profits that have already been taxed and the dividends, when received by shareholders, are taxed again. How does the use of a subchapter S corporation address the issue of double taxation?
Your journal entry must be at least 200 words in length.

 

 

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