Quail Corporation Is a C Corporation That Generates Net Income

question 28

True/False

Quail Corporation is a C corporation that generates net income of $125,000 during the current year. If Quail paid dividends of $25,000 to its shareholders, the corporation must pay tax on $100,000 of net income. Shareholders must report the $25,000 of dividends as income.

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Definitions:

Assignee

An individual or entity to whom rights or interests have been transferred by another, known as the assignor.

Assignor

A person or entity that transfers rights or interests in a contract or property to another party, known as the assignee.

Obligations

Duties and responsibilities imposed by law or contract.

Assignability

The capability of a contract or right to be transferred from one party to another.