Which of the Following Is a Means to Avoid the Double

question 3

Multiple Choice

Which of the following is a means to avoid the double taxation burden imposed on the profits of corporations?

• A) Treat all corporations as passthrough entities for federal tax purposes.
• B) Enact tax legislation that would make dividends nontaxable to all of the corporation's shareholders.
• C) Allow corporate shareholders a credit on their tax returns for the taxes paid by the corporation on the profits currently distributed to such shareholders as dividends.
• D) All of the above would avoid double taxation.

---

Definitions:

Unreimbursed Medical Expenses

Health-related costs that are not covered or compensated by insurance or other means.

Childcare

The care and supervision of a child or children, typically provided by someone other than the child's legal guardians.

Net Pay

The amount of money a worker takes home after deductions.

Withholding Tax

Federal, state, and local income taxes that are withheld by employers, who then send the money to the government.