Which of the Following Forms of Earnings Distributions Would Not

question 18

Multiple Choice

Which of the following forms of earnings distributions would not be subject to double taxation at the corporate and shareholder level?

• A)Dividend
• B)Stock redemption
• C)Partial liquidation
• D)Compensation paid to a shareholder/employee of the corporation.

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Definitions:

Remedy

A legal solution or compensation awarded to an aggrieved party in a judicial proceeding.

Breach of Contract

The failure, without legal excuse, to perform any promise or obligation outlined in a contract.

Respective Promises

Promises made by two or more parties where each party's promise is considered in regard to, or in relation to, the promises of the other party or parties.

Quasi-Contract

A legal concept where the court imposes a contractual obligation on a party who has not actually entered into a contract, to prevent unjust enrichment.