Olivia and Liam have heard complaints from fellow business owners about the tax burden they face due to their company’s business structure. What form of business ownership may involve double taxation?
The form of business ownership that may involve double taxation is a corporation, specifically a C corporation. In a C corporation, the business entity is taxed separately from the owners. This means that the corporation itself pays taxes on its profits, and any dividends distributed to the shareholders are also subject to taxation on the individual level. Thus, this leads to double taxation of corporate income.
