Return to the facts of problem 40 Assume that late in the year, Drew needs extra cash to pay off gambling debts and has the corporation declare a $25,000 dividend to provide the cash What is the effect of the dividend payment on the total income tax liability if Morris is a A corporation b An S cor...

a The dividend will be taxable to Drew and cannot be deducted b ...

Return to the facts of problem 40. Assume that late in the year, Drew needs extra cash

Question:

Return to the facts of problem 40. Assume that late in the year, Drew needs extra cash to pay off gambling debts and has the declare a $25,000 to provide the cash. What is the effect of the payment on the total income tax liability if Morris is
a. A An S Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...