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During the current year, Skylark Company had operating income of $420,000 and operating expenses of $250,000. In addition, Skylark had a long-term capital loss of
During the current year, Skylark Company had operating income of $420,000 and operating expenses of $250,000. In addition, Skylark had a long-term capital loss of $20,000, and a charitable contribution of $5,000. Toby, the sole owner of Skylark, is in the 24% tax bracket regardless of any income from Skylark. Determine the combined tax burden for Sklylark and Toby under the following independent situations.
1. Skylark is an LLC, and Toby withdraws all of the after-tax income from the company during the year.
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