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Now suppose that Agatha wishes to withdraw $20,000 per year from the business, and will reinvest any remaining aftertax earnings. 1latl'hat are the tax consequences
Now suppose that Agatha wishes to withdraw $20,000 per year from the business, and will reinvest any remaining aftertax earnings. 1latl'hat are the tax consequences to Agatha and the business of such a withdrawal if the business is operated as a sole proprietorship? How much aftertax cash ow will remain for reinvestment in the business? How much aftertax cash ow will Agatha have from the withdrawal? What are the tax consequences to Agatha and the business of a $20,000 withdrawal in the form of a dividend if the business is operated as a C corporation? How much aftertax cash ow will remain for reinvestment in the business? How much aftertax cash ow will Agatha retain from the dividend? If Agatha wishes to operate the business as a corporation but also wishes to receive cash ow from the business each year, what would you recommend to get a better tax result
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