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Corporate Finance

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Concept of Double Taxation

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Which one of the following BEST describes the concept of "double-taxation?"

A

Both owners pay taxes on a partnership's profits.

B

A proprietor pays both property taxes and income taxes on profits earned by the firm.

C

The profits of a corporation are taxed at the corporate tax rate, and any distributed after-tax profits are subject to personal taxation.

D

The entire pre-tax profits of a corporation are taxed at both the corporate and personal tax rates.

E

Since corporations receive their charters from states, they must pay both state and federal corporate taxes.