General Income Tax Factors, Fringe Benefits (LO. 3, 4)

Use tax year 2016.

Artis owns 40% of the Rhode Island Chile Parlor (RICP). During the current year, Rhode Island gives Artis fringe benefits worth $4,000 in addition to his $30,000 salary. RICP's net taxable income before considering the payments to Artis is $160,000. Assume Artis is single and has income from other sources that offsets his allowable deductions.

Refer to the Tax Rate Schedules to answer the following questions.

Determine Artis's taxable income and income tax liability if RICP is organized as each of the following.

Do not round intermediate computations. Round the final tax liability to the nearest dollar.

		Taxable Income		Income Tax Liability
a.	A partnership, and the salary is a guaranteed payment	$		$
b.	A partnership, and the salary is not a guaranteed payment	$		$
c.	A corporation	$		$
d.	An S corporation	$		$