Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please answer it asap Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto,lnc., which manufactures greeting cards. Toto's
please answer it asap
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto,lnc., which manufactures greeting cards. Toto's average annual net profit (before deduction of Mr. Lion's salary) is $340,000. For each of the following cases, compute the income tax burden on this profit. (Ignore any payroll tax consequences.) a. Mr. Lion's salary is $100,000, and Toto pays no dividends. b. Mr. Lion's salary is $100,000, and Toto distributes its after-tax income as a dividend. c.Toto is an S corporation. Mr. Lion's salary is $100,000, and Toto makes no cash distributions. Assume Toto's ordinary income qualifies for the 20 percent Section 199A deduction. the 20 percent Section 199A deduction. ordinary income qualifies for the 20 percent Section 199A deduction d. Toto is an S corporation. Mr.Lion draws no salary, and Toto makes no cash distributions. Assume Toto's ordinary income qualifies for e. Toto is an S corporation. Mr. Lion draws no salary, and Toto makes cash distributions of all its income to Mr. Lion. Assume Toto's a. Income tax burden on this profit b.Income tax burden on this profit c. Income tax burden on this profit d. Income tax burden on this profit e. Income tax burden on this profit 59,250 74,800 74,000 74,000 74,800Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started