Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

its not c corp 54,178 either [The following information applies to the questions displayed below) Tremaine would like to organize UTA as either an S'Corporation

its not c corp 54,178 either image text in transcribed
image text in transcribed
[The following information applies to the questions displayed below) Tremaine would like to organize UTA as either an S'Corporation or a C corporation. In either form, the entity will generate a 9 percent annual before-tax return on a $1,000,000 investment. Tremaine's marginal income tax rate is 37 percent, and his tax rate on dividends and capital gains is 23.8 percent (including the net investment income tax). if Tremaine organizes UTA as an Scorporation, he will be allowed to claim the deduction for qualified business income. Also, because Tremaine will participate in UTA's business activities, the income from UTA will not be subject to the net investment income tax. Assume that UTA will pay out 25 percent of its after-tax earnings every year as a dividend if it is formed as a C corporation a. How much cash after taxes would Tremaine receive from his investment in the first year if UTA is organized either as an S corporation or as a C corporation? a. How much cash after taxes would Tremaine receive from his investment in the first corporation or as a C corporation? Answer is complete but not entirely correct. After-tax cash flow $ 63,360 S corporation corporation $ 73,078 X

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Libby, Short

6th Edition

978-0071284714, 9780077300333, 71284710, 77300335, 978-0073526881

More Books

Students also viewed these Accounting questions

Question

Which of the key word is used to create an instance of a class?

Answered: 1 week ago

Question

How many bytes a char data type occupies?

Answered: 1 week ago

Question

The intermediate code is referred to as?

Answered: 1 week ago