Unless exceeding the permissible limit governed by tax law, interest paid by a corporation is a tax deduction for the paying corporation, but dividends are not deductible. This treatment, other things held constant, would tend to increase the use of debt financing by corporations. True False
Unless exceeding the permissible limit governed by tax law, interest paid by a corporation is a tax deduction for the paying corporation, but dividends are not deductible. This treatment, other things held constant, would tend to increase the use of debt financing by corporations. True False
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 9DQ
Related questions
Question
Unless exceeding the permissible limit governed by tax law, interest paid by a corporation is a tax deduction for the paying corporation, but dividends are not deductible. This treatment, other things held constant, would tend to increase the use of debt financing by corporations.
True
False
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