Mr Chan Has Created a Holding Company Between Himself and His

question 1

Multiple Choice

Mr. Chan has created a holding company between himself and his corporation (which earns only active business income) . This will permit which of the following?

• A) The corporation's income will not be taxed.
• B) Mr. Chan will receive dividends from the holding company, free of tax.
• C)The holding company will receive dividends from the corporation, free of tax.
• D) Mr. Chan will receive dividends from the corporation, free of tax.

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Definitions:

Annual Lease

is a contract specifying the terms under which one party agrees to rent property from another party for a period of one year.

Entrepreneur's Forgone Interest

The potential income an entrepreneur sacrifices by investing resources in their own business rather than applying them elsewhere.

Marginal Product

The additional output resulting from the use of one more unit of a factor of production, holding other factors constant.