During 2019, Scott received the following dividends on his stock:

Hopscotch Corp 50,000 Four Square Ltd 14,000

Hidenseek* 20,000

Goatsgruff, a German company 17,000

All traded on the US securities mkt

Note: The dividend paid by Hidenseek is not a qualified dividend because the holding period requirement is not satisfied (i.e., must be held more than 60 days during the 121-day period beginning 60 days before the ex-dividend date). All others are qualified dividends.

a. What is Scotts total tax on his dividends if he is in the 32% MTR?

b. Scott has a friend Paul who is single and earns about $24,000 a year and received $4,500 in qualified dividends from Hopscotch. What is Pauls tax on his 2019 dividend income?

c. Scott wants your advice on whether he should invest $10,000 in a corporate bond which pays a before tax 6% interest rate or buy stock that yields a 5% dividend before tax. He is in the 32% marginal tax bracket. Paul would like the same analysis as well but only has $1,000 to invest.