A company has paid taxes on net income. By law must distribute a portion of net profit as dividends.
They don't have to distribute a portion.
WRONG!!!
The
accumulated earnings tax imposed by
section 531 shall apply to every corporation (other than those described in subsection (b)) formed or availed of for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation,
by permitting earnings and profits to accumulate instead of being divided or distributed.
(b)Exceptions
The accumulated earnings tax imposed by
section 531shall not apply to—
(1) a personal holding company (as defined in
section 542),
(2) a corporation exempt from tax under subchapter F (section 501 and following), or
(3) a passive foreign investment company (as defined in
section 1297).
www.law.cornell.edu
WRONG!!!
I could post some stocks that don't pay a dividend.
Would that clear up your confusion?
Oh you dummy!
First... why are you ignoring the above link that shows exactly the tax consequences?
GEEZ you really are that dumb to think the IRS creates laws that don't apply?
Second Of course some stocks don't pay dividends!
I use to sell stocks so I've a little more comprehension it appears.
Finally I unlike you provide LINKS to substantiate my statements like the above
www.law.cornell.edu
FACT: As such, below we examine the 80 securities in the coveted
S&P 500 Index that currently do not pay out a dividend to shareholders, but may potentially start to based on a combination of several important factors.
We examine S&P 500 companies that do not currently pay out dividends and highlight those that have the potential to pay one in the future.
www.dividend.com