Jose, 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 Incorporated. This year, JJ generates $361,000 taxable income and pays a $72,200 dividend to Jose. Compute his tax on the dividend under each of the following assumptions:

Required:

The federal tax rules currently in effect apply to the dividend payment.

The federal tax system has been amended to allow shareholders to gross up dividend income by the corporate tax paid with respect to the dividend and credit this tax against their individual tax.

Jose, 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 Incorporated. This year, JJ generates $361,000 taxable income and pays a $72,200 dividend to Jose. Compute his tax on the divide under each of the following assumptions: Required: a. The federal tax rules currently in effect apply to the dividend payment. b. The federal tax system has been amended to allow shareholders to gross up dividend income by the corporate tax paid with respect to the dividend and credit this tax against their individual tax. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Compute his tax on the dividend assuming the federal tax system has been amended to allow shareholders to gross up dividend income by the corporate tax paid with respect to the dividend and credit this tax against their individual tax