a. How much cash after taxes would Sandra receive from her investment in the first year if BAL is organized as either an LLC or a C corporation?

Required information [The following information applies to the questions displayed below.] Sandra would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $500,000 investment. Sandra's marginal income tax rate is 37 percent and her tax rate on dividends and capital gains is 23.8 percent (including the 3.8 percent net investment income tax). If Sandra organizes BAL as an LLC, she will be required to pay an additional 2.9 percent for self- employment tax and an additional 0.9 percent for the additional Medicare tax. BAL's income is not qualified business income (QBI) so Sandra is not allowed to claim the QBl deduction. Assume that BAL will distribute all of its after-tax earnings every year as a dividend if it is formed as nearest whole dollar amount.) C corporation. (Round your intermediate computations to the a. How much cash after taxes would Sandra receive from her investment in the first year if BAL is organized as either an LLC or a C corporation? Answer is complete but not entirely correct After-tax cash flow 19,200 x LLC C 23,000x corporation b. What is the overall tax rate on BAL's income in the first year if BAL is organized as an LLC or as answers to 2 decimal places.) C corporation? (Round your final Answer is complete but not entirely correct. Overall Tax Rate LLC 37.00 % C corporation 21.00 %