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Ken Trudell and Terrell Brummer began a new consulting business on January 1, 2019. They organized the business as a C corporation, KT, Inc. During

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Ken Trudell and Terrell Brummer 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 $1,800,000. KT had operating expenses of $750,000 before any payments to Ken or Terrell. During 2019, KT paid dividends to Ken and Terrell in the amount of $280,000 each. Assume that Ken's wife earned $130,000 from her job, they file a joint return, have itemized deductions of $36,000, 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 deductio amount, the Tax Cuts and Jobs Act reduces the personal exemption amount to $0 for tax years from 2018 thr 2025, effectively suspending the exemptions for these years. - .x lid A corporation's taxable income is subject to a flat tax rate of 21%. th tern cen STANDARD DEDUCTION Filing Status Married individuals filing joint returns and surviving spouses Heads of households Unmarried individuals (other than surviving spouses and heads of households) Married individuals filing separate returns Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse Taxpayer claimed as dependent on another taxpayer's return: Greater of (1) earned income plus $350 op (2) $1,100. Those amounts are $2,600 and $3,300, respectively, for a taxpayer who is both aged and blind a. ta) int 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 Terrell organized the business as a limited liability company, KT, LLC. KT made a distribution of $280,000 each to Ken and Terrell during 2019. Compute the total tax liability of KT and Ken for 2019. Ignore any and additional tax on net investment income. ty for

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