Overview of Present Law and Selected Proposals Regarding the Federal Income Taxation of Small Business and Agriculture: Scheduled for a Public Hearing Before the Senate Committee on Finance on March 28, 2001

About this title: OCLC Number: 56313965 Excerpt: ...deduction is permitted. Otherwise, the portion in excess of the amount determined to be reasonable compensation is not deductible to the corporation and is treated as a dividend to the shareholder. In general, interest is deductible by a C corporation but dividends are not. Subject to non-tax business considerations, this creates a tax incentive favoring debt over equity in the capital structure. A common issue in the closely held corporate context is whether instruments denominated as debt ... read more

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