Catherine is the sole stockholder of Cat Co., a calendar-year C corporation. The corporation has a business need for a tract of land that Catherine owns personally. The plan is for the corporation to use the land for eighteen months from March 1, 2020 through August 31, 2021. The fair market value of the land is $500,000. Catherine's basis in the land is $100,000. She has held the land as an investment for the last five years. Catherine is considering the following three possible courses of action: 1. She transfers the land to the corporation in exchange for stock of the corporation in a 9351 transfer. 2. She leases the land to the corporation for its fair rental value of $3,000 per month. 3. She sells the land to the corporation for its fair market value of $500,000. Whichever choice is made, the land will be sold to a third party on September 1, 2021 for its fair market value, which she assumes will still be $500,000. The corporation's taxable income, exclusive of rental payments and/or gain or loss on land sale, will be $150,000 in 2020 and 2021. Catherine's adjusted gross income, exclusive of rental income and/or gain or loss on land sale, will be $200,000 in 2020 and 2021. She is single with no dependents. She will not itemize her deductions. Her standard deduction is $12,400 for 2020. The individual tax rate schedules for 2020 are attached. You may assume that the rate schedule and standard deduction will remain the same for 2021. The corporate tax rate on all taxable income will be a flat 21 percent in both years Required: Create an Excel spreadsheet that will compute the 2020 and 2021 income tax payable by Catherine and Cat Co. Use the individual tax calculators available on Blackboard. Compute the total tax payable under options 1, 2, and 3. Based on your findings, what do you recommend to Catherine? 2020 Tax Rate Schedules Single-Schedule X Head of household-Schedule Z If taxable The tax is: of the If taxable The tax is: of the income is: But not amount income is: But not amount Over- over- over Over- over- over- $0 $9,875 .......... 10% $0 $0 $14,100 .......... 10% $0 9,875 40,125 $987.50 + 12% 9,875 14,100 53,700 $1,410.00 + 12% 14,100 40,125 85,525 4,617.50 + 22% 40,125 53,700 85,500 6,162.00 + 22% 53,700 85,525 163,300 14,605.50 + 24% 85,525 85,500 163,300 13,158.00 + 24% 85,500 163,300 207,350 33,271.50 + 32% 163,300 163,300 207,350 31,830.00 + 32% 163,300 207,350 518,400 47,367.50 + 35% 207,350 207,350 518,400 45,926.00 + 35% 207,350 518,400 ....... 156,235.00 + 37% 510,300 518,400 ....... 154,793.50 + 37% 510,300 Married filing jointly or Qualifying Married filing separately-Schedule Y-2 Widow(er)-Schedule Y-1 If taxable The tax is: of the If taxable The tax is: of the income is: But not amount income is: But not amount Over over- over Over- over- over- $0 $19,750 .......... 10% $0 $0 $9,875 .......... 10% SO 19,750 82,250 $1,975.00 + 12% 19,750 9,875 40,125 $987.50 + 12% 9,875 82,250 171,050 9,235.00 + 22% 82,250 40,12585,525 4,617.50 + 22% 40,125 171,050 326,600 29,211.00 + 24% 171,050 85,525 163,300 14,605.50 + 24% 85,525 414,700 66,543.00 + 32% 326,600 163,300 207,350 33,271.50 + 32% 163,300 414,700 622,050 94,735.00 + 35% 414,700 207,350 311,025 47,367.50 + 35% 207,350 622,050 ....... 167,307.50 + 37% 622,050 311,025 ....... 83,653.75 + 37% 311,025 Tax rates for 2020 on long-term capital gains for single individuals: If the sum of ordinary taxable income plus long-term capital gains is less than $39,375, the tax rate on the long-term capital gains is 0 percent. If the sum of ordinary taxable income plus long- term capital gains is greater than $39,375, but less than $434,550, the tax rate on the portion of the long-term capital gain that causes the total to exceed $38,700 is 15 percent. If the sum of ordinary taxable income plus long-term capital gains is greater than $434,550, the tax rate on the portion of long-term capital gains that causes the total to exceed $434,550 is 20 percent