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Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporations financial records show the following:
Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporations financial records show the following:
Gross income from sales of goods | $ 1,593,000 |
---|---|
Operating expenses | (931,000) |
Salary paid to Ms. Xie | (301,000) |
Dividend distributions | (201,000) |
Required:
- Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.)
- How would your computation change if Ms. Xies salary was $502,000 and Xenon paid no dividends?
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