Jabar Corporation, a C corporation, projects that it will have taxable income of $260,000 before incurring any lease expenses. Jabars tax rate is 35 percent. Abdul, Jabars sole shareholder, has a marginal tax rate of 39.6 percent on ordinary income and 20 percent on dividend income. Jabar always distributes all of its after-tax earnings to Abdul.

a. What is the amount of the overall tax (corporate level + shareholder level) on Jabar Corp.s $260,000 prelease expense income if Jabar Corp. distributes all of its after-tax earnings to its sole shareholder, Abdul (include the 3.8% net investment income tax on dividend and rental income.)? (Input all answers as a positive number and round your answers to the nearest whole dollar.)

No Lease Payment

Taxable income before lease payment

Lease payment

Taxable income

Entity tax

After-tax entity earnings

Abduls tax on dividends

Abduls tax on lease payment

Overall tax

b. What is the amount of the overall tax on Jabar Corp.s $260,000 prelease expense income if Jabar leases equipment from Abdul at a cost of $28,300 for the year (include the net investment income tax on dividend and rental income.)? (Input all answers as a positive number and round your answers to the nearest whole dollar.)

$28,300 Lease Deduction Taxable income before lease payment

Taxable income before lease payment

Lease payment

Taxable income

Entity tax

After-tax entity earnings

Abduls tax on dividends

Abduls tax on lease payment

Overall tax

c. What is the amount of the overall tax on Jabar Corp.s $260,000 prelease expense income if Jabar Corp. leases equipment from Abdul at a cost of $28,300 for the year but the IRS determines that the fair market value of the lease payments is $18,500 (include the net investment income tax on dividend and rental income.)? (Input all answers as a positive number and round your answers to the nearest whole dollar.)

$18,500 Lease Deduction

Taxable income before lease payment

Lease payment

Taxable income

Entity tax

After-tax entity earnings

Abduls tax on dividends

Abduls tax on lease payment

Overall tax