Consider the following date for a married couple filing a joint tax return:

Annual Salary = $450,000

Interest income from bonds = $25,000

Dividend income from their stock accounts = $28,000

The couple sold a stock account for $45,000 which they had purchased for $32,000 only 8 months ago

The couple also had a $18,000 capital gain on a company stock they purchased 3 years ago

a. Using a FLAT tax rate of 28 percent for ordinary income, and standard deductions of $24,800 for married couples, calculate the couples total tax liability for the year.

B.What is the average tax rate for this couple?

C. Now suppose the couple form a corporation. Assuming the exact same data as above, explain whether their tax liability will be higher or lower and why. No calculations are needed!