Question

which corporation uses a double layer of taxation? limited liability company s corporation sole proprietorship c corporation

Explanation:

• A C - corporation is subject to double - layer taxation. First, the corporation pays taxes on its profits at the corporate level. Then, when dividends are distributed to shareholders, the shareholders pay taxes on those dividends at the individual level.
• A Limited Liability Company (LLC) is a pass - through entity. Its profits and losses pass through to the owners' personal tax returns, so there is no double - taxation at the entity level.
• An S - corporation is also a pass - through entity. Income, deductions, and credits flow through to the shareholders' tax returns, avoiding double - taxation at the corporate level.
• A sole proprietorship is a pass - through entity. The business income is reported on the owner's personal tax return, and there is no separate business - level taxation.

Answer:

C. C corporation