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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Cogito who wrote (136883)	4/18/2010 9:29:06 PM
From: Jeff Hayden	Read Replies (1) \| Respond to of 543518

You caught me! As to your statement: The "double taxation" issue comes up when corporate shareholders are taxed on the dividends they receive from the corporation. The argument is that the corporation has already paid taxes, so when the dividend income is taxed, the shareholders have, in effect, been taxed twice on the same earnings. The shareholder has no direct access to a company's profits - dividends from profits are meted out at the pleasure of the company's board essentially to prop-up the stock's price. Sometimes the dividend dispersal may not even be related to the profit made. Dividends can actually be thought of as an expense for supporting a stock, and maybe should be thought of as a legitimate business expense. But I'm not sure the IRS would look at it that way. In any event a dividend payout to a stockholder is income to that stockholder and is taxable. It's almost, but not quite the same as found money. :-)