Consider the following facts:

Other information:

• The corporation is formed with a $10,000 contribution.

• The corporation pays no dividends.

• The entities reinvest their after-tax earnings.

Using the format below, compare after-tax accumulations for each investment horizon.

Should the corporation make the S election for any of these investment horizons?

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Rf = Rc R. = 18% to = 21% tp = 37% for ordinary income = 20% for capital gains n = 6, 15, or 50 years