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Dividends are income to the receiving corporation. If it is a sub-chapter S corporation, it is income to the shareholders, as is any other income of the corporation.

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โˆ™ 2007-09-08 01:16:53
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Q: When a corporation receives a dividend from another corporation how is it taxed?
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Which form of business organization is taxed twice?

a C corporation the corporation is a separate entity who's profits are taxed then what's left of those profits are distributed/shared by the individual share holders who will be taxed on their individual share of the profits. Where as in a S corporation, subchapter corporation, the corporation entity I believe doesn't get taxed only the individual share holders do. Most small businesses are S corporations.

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