Which business structure has profits taxed at the corporate level rather than passing through to individuals?

Which business structure has profits taxed at the corporate level rather than passing through to individuals?

• A. C Corporation
• B. Cooperative
• C. Sole Proprietorship
• D. General Partnership

Answer: (A)

Profits in a C corporation are taxed at the corporate level, and when earnings are distributed to shareholders as dividends, they’re taxed again on the shareholders’ personal tax returns. This double taxation is a defining feature of C corporations. Other structures are generally pass-through: profits flow to owners or partners and are taxed on their personal returns, not at the corporate level. So, the scenario described matches the C corporation.

Profits in a C corporation are taxed at the corporate level, and when earnings are distributed to shareholders as dividends, they’re taxed again on the shareholders’ personal tax returns. This double taxation is a defining feature of C corporations. Other structures are generally pass-through: profits flow to owners or partners and are taxed on their personal returns, not at the corporate level. So, the scenario described matches the C corporation.