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You inherited 500 shares of IBM stock from your Great Aunt Mabel. As you contemplate selling the shares, your accountant informs you that the company pays a generous dividend, and advises you to start watching the firm's profits. When you are awarded the first dividend, you learn that it is considered a source of income and you will be taxed on that amount. You find this bothersome because the firm paid the dividend from after-tax profits (these dollars were already taxed). This phenomenon is called _________.a. corporate taxation adjusting.
b. double taxation.
c. shareholder tax penalty points.
d. entitlement tax.

Respuesta :

eooyibo123

Answer:

Double taxation.

Explanation:

Double taxation occurs when a single source of income is taxed twice. For example when income is taxed at company level and as personal income. In international trade income is taxed in two different countries.

Double taxation usually occurs when one has ownership in a company. The company is taxed on its profit and dividend is on e again taxed. As is seen with IBM share in the question.

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