4. PASS THROUGH TAXATION: EXAMPLE Revenues Expenses Net Income Corporate Tax Income Distributed Individual Tax 1 Net Distribution C Corporation 1,000 900 100 (35) 65 (9.75) 55.25 S Corporation 1,000 900 100 - 100 (33) 67 1 Assumes C corporation dividends are taxed at 15% and S corporation shareholder is taxed at 33%. Ignores state taxes.