Samantha Johnson owns Skylark Bakery, a sole proprietorship, which generates an annual operating profit of $100,000. In
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Samantha Johnson owns Skylark Bakery, a sole proprietorship, which generates an annual operating profit of $100,000. In addition, the bakery earns annual dividends of $5,000 from investing excess working capital in the stock of publicly traded corporations. Samantha is in the 37% marginal tax rate bracket irrespective of the bakery.?
In the past, Samantha has withdrawn $50,000 annually from the bakery. If Samantha conducts the business as a regular C corporation, what would be the annual income tax savings (or cost)?
For purposes of this analysis, use the 2019 tax rates and ignore any employment tax or state tax considerations.?
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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