Why is it generally preferable to increase salaries, interest, or rental payments to employee-shareholders in a closely held corporation rather than increase dividends? Question content area bottom Part 1 A. Payments of additional salary, interest, or rent is preferable because they are taxed at lower rates than dividends at the corporate level. B. Increasing dividends creates a taxable event for the employee-shareholders in a closely held corporation. Increasing salaries, interest, or rental payments only causes the salaries to be taxable to the employee-shareholders, and the closely held corporation can retain more income within the company. C. Payments of additional salary, interest, or rent is preferable for a corporation because these amounts, if reasonable, can be deducted by the closely held corporation. Dividends are not deductible to the closely held corporation. D. It is generally preferable to increase salaries, interest, or rental payments because closely held corporations can only pay a set amount of dividend income each year, not allowing for employee-shareholders other options for increased income