Income, not dividends, double-taxed.

I read with interest "An Opinion on Dividends' Taxation" and the claim that dividends are not double-taxed. While I agree the dividends are not double-taxed, the income, however, is.

The corporation pays tax on its earnings and then the stockholder pays tax when dividends are paid by the corporation (out of aftertax profits) and included as income in the stockholder's tax return.

One other point: The corporation's board of directors, not management, declares dividend amounts.

Richard P. Creagh, CPA

Brea, California

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Title Annotation:	Letters
Author:	Creagh, Richard P.
Publication:	Journal of Accountancy
Article Type:	Letter to the Editor
Date:	Feb 1, 2004
Words:	81
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