Multiple Choice

The Canadian income tax system is structured in a manner which attempts to prevent double taxation between entities. Which of the following is NOT a method to avoid double taxation?

a.) An individuals taxable income is generally reduced by the amount of dividends received from taxable Canadian corporations.

b.) Corporate taxable income is generally reduced by the amount of dividends received from other taxable Canadian corporations.

c.) Generally, Canadian corporate after-tax profits may be shifted to other Canadian corporations by way of dividends, without a tax consequence.

d.) None of the above statements are incorrect when it comes to avoiding double taxation.