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question what kind of dividends should bob give nonliquidating or cash dividends i p 4289166


What kind of dividends should Bob give? nonliquidating or cash dividends? I personally think giving each employee shareholder a bonus instead of declaring dividends to avoid double taxation for the corporation. Even though the tax rate for bonuses are higher for some (not all) employees, they are going to be taxed either way. This opinion looked like the best route for the client from a tax standpoint. However, I like your statement on how Bob should reinvest his profits wisely so its considered a business expense so it can be deducted.

If Bob is letting his employees use his private plane as fringe benefits would it be a deduction or if employees are subjected to taxation for this benefit, would that affect Bob?

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