Orie and Jane, husband and wife, operate a sole proprietorship. They expect their taxable income next year to be $450,000, of which $250,000 is attributed to the sole proprietorship. Orle and Jane are contemplating Incorporating their sole proprietorship. (Use the tax rate schedule.) a. Using the married-joint tax brackets and the corporate tax rate, find out how much current tax this strategy could save Orle and Jane (Round your intermediate calculations and final answer to nearest whole dollar amount.) Current tax saved b. How much of the income should be converted into corporate Income to maximize tax savings? Income left Check my work Hyundal is considering opening a plant in two neighboring states. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,000,000 pretax profit Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $930,000 of pretax profit. a. What is the after state taxes profit in the state with the 10% tax rate? After state taxes profit b. What is the after state taxes profit in the state with the 2% tax rate? After state taxes profit c. Which state should Hyundal choose? Option 1 Option 2 Daniel is considering selling two stocks that have not fared well over recent years. A friend recently informed Daniel that one of his stocks has a special designation, which allows him to treat a loss up to $50,000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has a loss of $60,000 on each stock. If Daniel's marginal tax rate is 35 percent and he has $120,000 of other capital gains (taxed at 15 percent), what is the tax savings from the special tax treatment? Tax savings Helen holds 1,000 shares of Fizbo Inc. stock that she purchased 11 months ago. The stock has done very well and has appreciated $20/share since Helen bought the stock. When sold, the stock will be taxed at capital gains rates (the long-term rate is 15 percent and the short-term rate is the taxpayer's marginal tax rate). Ignore the time value of money. a. If Helen's marginal tax rate is 35 percent, how much would she save by holding the stock an additional month before selling Tax savings b. What might prevent Helen from waiting to sell? Helen bears if she holds the stock there is market volatility may be selling the stock for an additional month or if the company substantially if addition, Helen The stock price could encounters financial for which she may difficulties. In be unwilling to wait Orie and Jane, husband and wife, operate a sole proprietorship. They expect their taxable income next year to be $450,000, of which $250,000 is attributed to the sole proprietorship. Orle and Jane are contemplating Incorporating their sole proprietorship. (Use the tax rate schedule.) a. Using the married-joint tax brackets and the corporate tax rate, find out how much current tax this strategy could save Orle and Jane (Round your intermediate calculations and final answer to nearest whole dollar amount.) Current tax saved b. How much of the income should be converted into corporate Income to maximize tax savings? Income left Check my work Hyundal is considering opening a plant in two neighboring states. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,000,000 pretax profit Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $930,000 of pretax profit. a. What is the after state taxes profit in the state with the 10% tax rate? After state taxes profit b. What is the after state taxes profit in the state with the 2% tax rate? After state taxes profit c. Which state should Hyundal choose? Option 1 Option 2 Daniel is considering selling two stocks that have not fared well over recent years. A friend recently informed Daniel that one of his stocks has a special designation, which allows him to treat a loss up to $50,000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has a loss of $60,000 on each stock. If Daniel's marginal tax rate is 35 percent and he has $120,000 of other capital gains (taxed at 15 percent), what is the tax savings from the special tax treatment? Tax savings Helen holds 1,000 shares of Fizbo Inc. stock that she purchased 11 months ago. The stock has done very well and has appreciated $20/share since Helen bought the stock. When sold, the stock will be taxed at capital gains rates (the long-term rate is 15 percent and the short-term rate is the taxpayer's marginal tax rate). Ignore the time value of money. a. If Helen's marginal tax rate is 35 percent, how much would she save by holding the stock an additional month before selling Tax savings b. What might prevent Helen from waiting to sell? Helen bears if she holds the stock there is market volatility may be selling the stock for an additional month or if the company substantially if addition, Helen The stock price could encounters financial for which she may difficulties. In be unwilling to wait