Student name:

MULTIPLE CHOICE $-$ Choose the one alternative that best completes the statement or

answers the question.

Corporate dividends represent:

A$)$ tax$-$free income for the recipient because they are distributions of pretax income.

B$)$ tax$-$free income for the recipient because they are distributions of aftertax income.

C$)$ pretax income from the corporation which becomes taxable income for the recipient.

D$)$ taxable income for both the corporation and the shareholder, whether or not dividends

are paid to shareholders.

E$)$ aftertax income from the corporation which becomes taxable income for the recipient.

Marissa and Raj are equal general partners in a business. They are content with their current