Ken Thomas and Truman Brinkman began a new consulting business on January 1, 2019. They organized the business as a C corporation, KT, Inc. During 2019, the corporation was successful and generated revenues of $ 2100000. KT had operating expenses of $ 715000 before any payments to Ken or Truman. During 2019, KT paid dividends to Ken and Truman in the amount of $ 330000 each. Assume that Ken's wife earned $ 150000 from her job, they file a joint return, have itemized deductions of $ 32000, and have no children. (Assume the qualified dividends tax rate is 15%.)

Married, Filing Joint and Surviving Spouse

If taxable income is:	The tax is:
Not over $19,400. . . . . . . . . . . . . . . . . . .	10% of taxable income.
Over $19,400 but not over $78,950. . . . . .	$1,940.00 + 12% of the excess over $19,400.
Over $78,950 but not over $168,400. . . . .	$9,086.00 + 22% of the excess over $78,950.
Over $168,400 but not over $321,450. . . .	$28,765.00 + 24% of the excess over $168,400.
Over $321,450 but not over $408,200. . . .	$65,497.00 + 32% of the excess over $321,450.
Over $408,200 but not over $612,350. . . .	$93,257.00 + 35% of the excess over $408,200.
Over $612,350. . . . . . . . . . . . . . . . . . . . .	$164,709.50 + 37% of the excess over $612,350.

Personal and Dependency Exemptions Suspended:In conjunction with the increased standard deduction amount, the Tax Cuts and Jobs Act reduces the personal exemption amount to $0 for tax years from 2018 through 2025, effectively suspending the exemptions for these years.

STANDARD DEDUCTION

Filing Status

Married individuals filing joint returns and surviving spouses $24,400

Heads of households $18,350

Unmarried individuals (other than surviving spouses and heads of households) $12,200

Married individuals filing separate returns $12,200

Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses $1,300*

Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse $1,650*

Taxpayer claimed as dependent on another taxpayers return: Greater of (1) earned income plus $350 or (2) $1,100.

* These amounts are $2,600 and $3,300, respectively, for a taxpayer who is both aged and blind.

A corporation's taxable income is subject to a flat tax rate of 21%.

a.	Compute the total tax liability of KT and Ken and his wife for 2019.
b.	Instead of organizing the consulting business as a C corporation, assume Ken and Truman organized the business as a limited liability company, KT, LLC. KT made a distribution of $330,000 each to Ken and Truman during 2019. Compute the total tax liability of KT and Ken for 2019. Ignore any and additional tax on net investment income.