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
Chapter12: S Corporations
Section: Chapter Questions
Problem 41P
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
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT