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Paula is starting a new business and deciding whether to organize it as an LLC or a C corporation. She projects that the business will
Paula is starting a new business and deciding whether to organize it as an LLC or a C corporation. She projects that the business will have a net loss for tax purposes of $ in the first year of operations She then expects the business to have taxable incomeof $ in and taxable incomeof $ in The following assumptions apply:Paula's individual marginal tax rate is and the corporate tax rate is Assume a discount rate of Paula is not subject to any limitations on deducting flowthrough losses on her individual returnThe business will not distribute any money to Paula during these three yearsIgnore the QBI deduction and selfemployment taxesCalculate the NPV of the tax cost or benefit if she organizes as an LLC or if she organizes as a C corporation. Enter any tax COST as a negative number; enter any tax BENEFIT as a positive number. Round all intermediate calculations and final answers to the nearest whole dollar.HINT: If you need to carry forward any net operating losses, recall the NOL carryover rules!Tax cost or benefit if LLC:Tax cost or benefit if C Corporation:
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