During a recent IRS audit, the revenue agent decided that Apple, an individual, used his closely held corporation, Fruit Tree Inc., to avoid shareholder tax by accumulating earnings beyond the reasonable needs of the business. Fruit Tree Inc's taxable income for the year was $800,000 and it paid no dividends. Compute Fruit Tree Incis accumulated earnings tax, assuming that it had accumulated $208.000 after-tax income in prior years. Also assume that the accumulated earnings tax rate is 20% and up to $250,000 can be accumulated without incurring the accumulated earnings tax, 5151.600 O $160.000 $136,000 O $110,000 Mango, an individual, has a marginal tax rate on ordinary income of 37 percent. He currently earns $1,400,000 per year of ordinary income through a business operated as a sole proprietorship. If Mango does not require current cash from the business, calculate the potential decrease in his annual tax liability if he incorporates and operates the business through a corporation. Assume the corporate tax rate is 21%. $224,000 O $294.000 $42.000 $140.000