James, who is in the 35 percent marginal tax bracket with a 15 percent tax rate on dividends, owns 100 percent of the stock of JJ Inc. This year, JJ generates $540,000 taxable income and pays a $108,000 dividend to James. Compute his tax on the dividend under each of the following assumptions:

Required:

1. The special qualified dividend tax rate provided above applies to the dividend payment

Compute his tax on the dividend assuming the federal tax rules currently in effect apply to the dividend payment.

	Tax on the dividend_____________