3) Goliath Supplies Inc. (a C Corp) reports total net income of $575,000 in 2016. This includes $25,000 of income from 5.25% Jackson County municipal bonds. Thus, the Corporations taxable income is equal to $550,000. using 2016 tax rate of 34%

What is Goliaths tax liability for 2016?

What are Goliaths marginal, average and effective tax rates, respectively?

If equivalent taxable bonds pay 7.50% interest, what is the implicit tax rate for the Jackson County bonds? (see handout for Implicit Tax Rate)

Did Goliath make a good choice to invest in the municipal bonds instead of the taxable bonds?

4) Joe owns a 25% interest in an S Corporation that earned $150,000 in 2016. He also owns 20% of the stock in a C Corporation that earned $750,000 during the year. The S Corporation distributed $50,000 to Joe, and the C Corporation paid dividends of $40,000 to Joe. How much income must Joe report from these businesses on his individual income tax return?