logout
help
framed forum
go pro
subscriptions
account
create thread
LegalGround Forum >> Corp Law Question
| 3/14/10 8:05 PM | |
sux@bjj
8 
Edited: 03/14/10 9:29 PM Member Since: 1/1/01 Posts: 9386 |
dividends on s corporation and c corporation differences? |
| 3/20/10 1:08 AM | |
|
seg
49
Member Since: 3/28/05 Posts: 11299 |
From a state law corporate law standpoint a dividend is a dividend regardless of whether the corporation is a C or an S corporation. The only difference is in the federal income tax consequences of the dividend. In most instances a dividend from a C corporation is taxable income to the shareholder and his adjusted tax basis in his stock is unchanged. In most instances a dividend from an S corporation is not taxable income to the shareholder and instead reduces his basis in his stock. This is basically because the S corporation is a pass-through entity for income tax purposes and the C corporation is a tax paying entity. |
| 3/22/10 3:59 PM | |
|
Fake Pie
26
Member Since: 12/2/05 Posts: 22876 |
To be clear, the dividend on the S-Corp isn't taxable AGAIN. However, any income the S-Corp has is taxable to all the stockholders, pro rata, whether or not they make any dividends. With the C-Corp, it is taxed to the Corp as corporate income as it comes in, then is taxed to the stockholder when and if a dividend is ever made... "again." Ye olde "double taxation" issue. |
Reply Post
You must log in to post a reply. Click here to login.
