Question

What does double taxation mean?


Sole proprietorships and partnerships pay both personal income taxes and business income taxes.


For-profit businesses must pay both income taxes and property taxes.


Nonprofit organizations are exempt from paying either income taxes or property taxes.


Corporations pay income taxes on their profits, and stockholders pay taxes on their dividends.

Answer 1

What does double taxation mean? Corporations pay income taxes on their profits, and stockholders pay taxes on their dividends.

When income is subject to double taxation, it means that corporations must pay income taxes on their profits, and stockholders must pay taxes on their dividends. Profits and dividends refers to how both the corporation and the stockholders receive income. When you are taxed twice, you are taxed at a business level and then again on a personal level. Those who are subject to this type of tax earn a high level of income and are then taxed twice because of it.

Answer 2

Answer:

Corporations pay income taxes on their profits, and stockholders pay taxes on their dividends.

Explanation:

Double taxation is a term used to describe the way taxes are imposed on corporate shareholders and on corporations. The corporation is taxed on its earnings (profits), and the shareholders are taxed again on the dividends they receive from those earnings.