Grant and Marvin organized a new business as a corporation in which they own equal interests. The new business generated a $$65,000$ operating loss for the year.

Required:

a$.$ Assume the corporation expects to generate $$500,000$ of income next year and has a $21$ percent tax rate. Calculate the net present value of the future tax savings associated with the current year operating loss, using a $4$ percent discount rate. $($Do not round intermediate computations. Round your final answer to the nearest whole dollar amount.$)$

Answer is complete but not entirely correct.

NPV of future tax savings

b$.$ Now assume that the corporation makes an election under Subchapter $S$ to be treated as a passthrough entity If Grant's marginal tax rate is $35$ percent and Marvin's marginal tax rate is $37$ percent, calculate the tax savings associated with the current year operating loss. Assume the basis and excess business loss limitations do not apply.