Question

Which of the following is NOT tax deductible for a corporation?

	a.	interest paid
	b.	dividends paid
	c.	depreciation
	d.	all of the above are tax deductible

Answer 1

Correct option is "B" -Dividend paid

Dividend is a return on investment (or equity) paid to shareholders out of after tax profit by corporation .Thus it is a appropriation of profit (distributed out of after tax profit) and not a tax deductibe expenditure.

Reason for Other incorrect options :

Both interest and depreciation is an expense for a corporation which is deducted from revenue while calculating before tax income .