Series 65: Double Taxation

Taken from our Series 65 - NASAA Uniform Investment Advisor Law Exam

Definition of the term Double Taxation...

when a corporation pays taxes on its net profit and pays dividends to its shareholders (the company owners). The shareholders then have to report the dividends as income on their tax returns and pay personal income taxes on the dividend income. This double taxation does not occur when a corporation chooses not to distribute any profits to its shareholders.

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