In Order to Shift the Taxation of Dividend Income from a Parent

question 19

Multiple Choice

In order to shift the taxation of dividend income from a parent to a child

• A)the parent must direct the corporation to pay the dividend to the child.
• B)the parent must transfer ownership of the stock to the child.
• C)the parent can deposit the dividend in the child's bank account.
• D)all of the above will result in shifting the taxation to the child.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at those prices.

Price Makers

Entities that have the ability to control the prices of the products or services they offer, due to lack of significant competition.

Downward-Sloping Demand

Describes the general tendency for the demand for a good or service to decrease as its price increases.

Monopolistic Competitors

Firms in a market structure where many companies sell products or services that are similar but not identical, allowing for competition based on quality, price, and branding.