We have covered C and S Corporations. What are some of the advantages and disadvantages of each formation? List two for each. In addition, C Corporations are taxed at a 21% flat rate. How can an S Corporation benefit from this flat tax rate if the net profits flow through to the shareholder via a K-1 and are reported in their individual income tax (Form 1040)? Imagin the shareholder is at a 35% tax bracket. Explain

We have covered C and S Corporations. What are some of the advantages and disadvantages of each formation? List two for each. In addition, C Corporations are taxed at a 21% flat rate. How can an S Corporation benefit from this flat tax rate if the net profits flow through to the shareholder via a K-1 and are reported in their individual income tax (Form 1040)? Imagin the shareholder is at a 35% tax bracket. Explain

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter10: Individuals: Income, Deductions, And Credits

Section: Chapter Questions

Problem 2BD

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If Corp X(C Distribution) distributes Blackacre to shareholders cost $10000 FMV $100000a. Is the corporation taxed? Give Code Section and amount of taxb. Are Shareholders taxed? Give character(ordinary income/capital gain) and code section(s) to support your answer.
Assume that the corporate tax rate is 34% and the personal tax rate is 30%. The founders of a newly formed earnings, so all of its after-tax income will be paid out to its investors, who will have to pay personal taxes or can spend under the corporate and partnership forms of organization? O a. 21.90% O b. 28.56% O c. 23.56% O d. 23.80% O e. 22.61%
Using the 2019 corporate tax rate: a. What are the tax liability, the marginal tax rate, and the average tax rate for a corporation with $248, 300 taxable income? b. What are the tax liability, the marginal tax rate, and the average tax rate for a corporation with $39,253,000 taxable income? (Create a problem similar to the one above and give multiple choice answer)
You are a shareholder in an S corporation. The corporation earns $1.67 per share before taxes. As a pass through entity, you will receive $1.67 for each share that you own. Your marginal tax rate is 20%. How much per share is left for you after all taxes are paid? Amount that remains is $ per share. (Round to the nearest cent.)
Requirements a. What is Sigma Corporation's income tax liability assuming its taxable income is (a) $82,000, (b) $123,000, and (c) $55 million. b. How would your answers change if Sigma were a personal service corporation? Requirement a. (a) What is Sigma Corporation's income tax liability assuming its taxable income is $82,000. ma Corporation's income tax liability = Requirement a. (b) What is Sigma Corporation's income tax liability assuming its taxable income is $123,000. pted Sigma Corporation's income tax liability Requirement a. (c) What is Sigma Corporation's income tax liability assuming its taxable income is $55 million. (Enter your answer in dollars, not millions.) = Sigma Corporation's income tax liability: = Requirement b. How would your answers change if Sigma were a personal service corporation? (a) Assume its taxable income is $82,000. Sigma Corporation's income tax liability as a personal service corporation : = (b) Assume its taxable income is $123,000.
assume the tax rate for all c-corporations is 21%.
Assume your new venture, organized as a proprietorship, is in its first year of operation. You expect to have taxable income of $50,000. Use the income tax rate information contained in Figure 3.6 to estimate the amount of income taxes you would have to pay. Requirement: If your venture had been organized as a standard corporation instead of a proprietorship, calculate your income tax liability.
b. What is the overall tax rate on LAB's income in the first year if LAB is organized as an S corporation or as a C corporation? Note: Round your final answers to 2 decimal places. s corporation C corporation Overall Tax Rate 37.00 % %6
1. Gain on sale of shares of domestic corporation directly sold to a buyer is subject to what kind of tax? * a. Basic Income Tax (BIT) b. Capital Gains Tax (CGT) c. 8% Preferential Tax d. Real Property Tax (Local Tax) e. None of the abovementioned choices 2. Gain on sale of an unlisted shares from a non-listed Domestic Corporation is subject to what kind of tax? a. Basic Income Tax (BIT) b. Capital Gains Tax (CGT) c. 8% Preferential Tax d. Real Property Tax (Local Tax) e. None of the abovementioned choices 3. Gain on sale of shares of a closely-held corporation is subject to what kind of tax? a. Basic Income Tax (BIT) b. Capital Gains Tax (CGT) c. 8% Preferential Tax d. Real Property Tax (Local Tax) e. None of the abovementioned choices
Calculate Anaheim Corporation's excess net passive income tax in each of the following alternative scenarios: Note: Leave no answer blank. Enter zero if applicable. c. Passive investment income, $100,000; expenses associated with passive investment income, $40,000; gross receipts, $120,000; taxable income if a C corporation, $40,000; corporate Earnings and profit, $0. Excess net passive inocme tax?
You are a shareholder in a corporation. The corporation earns $8.00 per share before taxes. After it has paid taxes, it will distribute the rest of it's earnings to you as a dividend (We make this simplifying assumption, but should note that most corporations retain some of their earnings for reinvestment). The dividend is income to you, so you will then pay taxes on these earnings. The corporate tax rate is 25% and your tax rate on dividend income is 20%. How much of the earnings remains after all taxes are paid?
Required information Skip to question [The following information applies to the questions displayed below.] Sandra would like to organize LAB (a legal corporation) as either an S corporation or a C corporation for tax purposes. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $500,000 investment. Sandra's marginal income tax rate is 37 percent and her tax rate on qualified dividends and net capital gains is 20 percent. LAB's income is not qualified business income (QBI), so Sandra is not allowed to claim the QBI deduction. Assume that LAB will distribute all of its earnings after entity-level taxes every year. Ignore the additional Medicare tax and the net investment income tax when computing your answers. Note: Round your intermediate computations to the nearest whole dollar amount. b. What is the overall tax rate on LAB's income in the first year if LAB is organized as an S corporation or as a C corporation? Note: Round your…