had lived under a classical tax system, which of the following is closest to the additional tax she would have to pay as a Rio shareholder?
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- Bonnie is married and has one child. She owns Bonnies Rib Joint, which produces a taxable income of approximately 120,000 per year. a. Assume that Bonnies taxable income is 40,000 without considering the income from the rib joint. How much tax will she pay on the 120,000 of income from the rib joint? b. You work for the firm that prepares Bonnies tax return. Bonnie has asked the partner for whom you work to advise her on how she might lower her taxes. The partner has assigned you this task. Draft a memorandum to the partner that contains at least two options Bonnie could use to lower her taxes. For each option, explain the calculations that support the tax savings from your recommendation.Lisa records nonrefundable Federal income tax credits of 65,000 for the year. Her regular income tax liability before credits is 190,000, and her TMT is 150,000. a. What is Lisas AMT? b. What is Lisas regular income tax liability after credits?Sheila, a single taxpayer, is a retired computer executive with a taxable income of 100,000 in the current year. She receives 30,000 per year in tax-exempt municipal bond interest. Adam and Tanya are married and have no children. Adam and Tanyas 100,000 taxable income is comprised solely of wages they earn from their jobs. Calculate and compare the amount of tax Sheila pays with Adam and Tanyas tax. How well does the ability-to-pay concept work in this situation?
- Samantha lives under an imputation tax system. Her income tax rate is 30%, which applies to all of her income, including wages, interest income and dividend income. Samantha owns 1000 shares of Rio Inc. which has 3.2 billion shares outstanding and taxable income of $1.8 billion (in the current year). Rio’s pays corporate tax rate at 28% and its payout ratio in the past has been 60%. Rio has just announced that it will maintain the past payout ratio and all dividends (to be paid next month) will be fully franked. Given this information, if Samantha had lived under a classical tax system, which of the following is closest to the additional tax she would have to pay as a Rio shareholder? $72.90 $82.45 $66.15 $45.25 None of the other answersLeona, whose marginal tax rate on ordinary income is 37 percent, owns 100 percent of the stock of Henley Corporation. This year, Henley generates $1 million of taxable income. If Henley wants to pay all of its after-tax earnings to Leona as a dividend, calculate the amount of the dividend payment. Calculate Leona’s tax due on the dividend computed in part a, and her after-tax cash flow from the dividend receipt. Compute the combined corporate and individual tax burden on Henley’s $1 million of current year income, and the effective combined tax rate on this income.Jamie has taxable income of $107,812. She is single and her tax rates are 10% on the first $7,000 of taxable income, 15% of the amount over $7,000 up to $28,400 of taxable income, 25% of the amount over $28,400 up to $80,000, and 35% over $80,000. What is Jamie's average tax rate? (keep 4 decimal places)
- Roxi owns 500 shares of common stock in the Big Wheeler Corporation. She is pleased to learn that the company earned a very nice profit over the most recent operating period. The company has announced that it will pay each shareholder a dividend of $1 per share out of its after-tax profits. Because Big Wheeler has already paid corporate taxes on this profit, this dividend payout will represent tax-free income for Roxi and this is also called what O Yes taxes have already been paid and its called single payout O No, she still owes taxes and it's called double taxation O No, she still owes taxes and it's called Capital gains tax O Yes, it's tax free and called double exemptionPepa Madrigal has operated a very successful bakery for 30years, and has accumalated investment that earn annual interest income of $40,000.Her other income put her in the top income tax bracket for personal tax purposes. She has a son, Antonio who is 22 years old and currently has no income. Antonio'sonly personal tax credit is the perssonal tax credit.Determine the maount of federal incometaxes that could be saved by transfering the interest earning investments to a trust with Antonio as the income beneficiary,assuming that the trust will be required todistribute all of its income each year.James, who is in the 35 percent marginal tax bracket with a 15 percent tax rate on dividends, owns 100 percent of the stock of JJ Inc. This year, JJ generates $306,000 taxable income and pays a $61,200 dividend to James. Compute his tax on the dividend under each of the following assumptions: Required: The federal tax rules currently in effect apply to the dividend payment.
- Katie has taxable income of $45,000. She is single and her tax rates are 10% on the first $7,000 of taxable income, 15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder. What is Katie's average tax rate? (Keep 4 decimal places)Jamie has taxable income of $142,180. She is single and her tax rates are 10% on the first $7,000 of taxable income, 15% of the amount over $7,000 up to $28,400 of taxable income, 25% of the amount over $28,400 up to $80,000, and 35% over $80,000. What is Jamie's tax liability? (keep 2 decimal places when necessary)Ann holds 1,500 shares of Minex Corporation, a publicly traded Canadian corporation. In the current tax year, Minex declared and paid a dividend of $4.50 per share. Ann's tax rate is 42%. How much taxes will she pay on this income?