During the current year, V Corp reports taxable income of $400,000 before paying a salary to Sarah, its sole share holder. Sarah's marginal ordinary tax rate on income is 34%, and marginal tax rate on dividends is 15%. Use appendix d of your text book to calculate V Corp's corp tax rate. APPENDIX D STATES: (see chart)

taxable income	tax
$335,000-$10,000,000	$113,900 + 34% of taxable income over $335,000

How much total income tax will V Corp and Sarah pay on the $400,000 of income if V Corp pays sarah a salary of $100,000 of which $50,000 is deemed reasonable salary by the IRS and distributes the remaining after-tax earnings to Sarah as a dividend?

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