What Is a Deemed Dividend?


A deemed dividend is a tax policy used by publicly traded firms as a means of shifting tax responsibility from shareholders during the sale of company shares. Dividends are overheads made by a company to its shareholder members.
Q&A Related to "What Is a Deemed Dividend?"
A deemed dividend pays the taxes, also called capital gains taxes, on a shareholder's percentage of company profits, In turn, the shareholder increases the cost basis of his existing
In the accounting world Income is synonymous with revenue. I.E. any money you earned. A dividend is money paid back to the shareholders if the company makes a net profit after all
Any payment by way of a loan or advance by a closely-held company to a registered shareholder holding substantial interest - provided the loan should not have been made in the ordinary
Dividend = shareholder's share of the profits. Dividend yield = dividend as percentage of share price, eg. a five cent dividend = five cents given to a share holder for each share
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What Is a Deemed Dividend?
A deemed dividend is a tax instrument used by publicly traded corporations as a means of shifting tax liability from shareholders during the sale of company stock. The IRS also permits the use of a deemed dividend as a means of spreading out investor tax... More »
Difficulty: Easy
Source: www.ehow.com
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