Distributions by a Corporation to Its Shareholders Are Presumed to Be

question 14

True/False

Distributions by a corporation to its shareholders are presumed to be a dividend unless the parties can prove otherwise.

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Definitions:

Payee

The party in a financial transaction who receives the payment.

Note Receivable

A written promise that a specified amount of money, plus potentially interest, will be paid by one party to another by a specific date.

Maker

In finance, the party that creates or issues a financial instrument, such as a check.

Principal

The original sum of money borrowed in a loan, or the original amount invested, excluding any interest or dividends.