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Posted by Alan on September 3, 2008, 7:53 pm
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nish wrote:
>> nish wrote:
>>> Can an S-Corporation pay qualified dividends? If an S-Corporation wants
>>> to take on debt, can it do the financing as bonds and pay "qualified"
>>> dividends, which would be eligible for the reduced 15% tax rate on
>>> qualified dividends?
>>>
>>> Does the answer differ depending on whether payment is to a shareholder
>>> or non-shareholder?
>>>
>>> nish
>> Qualified dividends come only from regular, i.e. C corporations.
>>
>> Look at it this way, since net profit on page one of the 1120S is taxed,
>> you wouldn't also want to pay more tax on "supposed" dividends, right?
>
> I was trying to find a way to offer qualified dividends to someone offering
> debt financing to an S Corporation, so taxes to the shareholder aren't the
> main issue.
>
> For the case of a C Corporation, can qualified dividends be issued to a bond
> holder, or are they only for shareholders?
>
> nish
>
Qualified dividends are paid out of profits to shareholders.
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