Assume the corporation in Problem C:11-61 (and C:6-56) had been an S corporation for its first 12

Question:

Assume the in Problem C:11-61 (and C:6-56) had been an S for its first 12 years, during which it distributed just enough cash for the shareholder to pay taxes on the pass-through income. Thus, the S reinvested after-tax income. Now the is considering revoking its S election and operating as a C for the remaining 20 years with no distributions. Show the results of remaining an S versus revoking the election. Also show supporting models and calculations. Which alternative should the adopt? Ignore the accumulated earnings tax for C corporations. How does your answer change if the C corporation's tax rate is 15% instead of 35%?
Corporation
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