Problem 17-32 (LO. 3, 7) Genesis Company (GC), a calendar year entity, has one owner, who is in the 37% Federal income tax bracket (any net capital gains or dividends would be taxed at a 20% rate). GC's gross income is $395,000, and its ordinary trade or business deductions are $245,000. Compute the Federal income tax liability on GC's income for the current year under the following assumptions. Ignore the standard deduction (or itemized deductions) and the deduction for qualified business income. If required, round computations to the nearest dollar. a. GC is operated as a proprietorship, and the owner withdraws $100,000 for personal use. GC's taxable income for the current year is $ 150,000 and the tax liability associated with the income from the sole proprietorship is $ 55,500 b. GC is operated as a C corporation, pays out $100,000 as salary but no dividends to its shareholder. 50,000, and GC's tax liability is $ GC's taxable income for the current year is $ 10,500 10,500 The shareholder's tax liability is c. GC is operated as a C corporation and pays out no salary or dividends to its shareholder. GC's taxable income for the current year is 150,000, and GC's tax liability is $ 31,500 d. GC is operated as a C corporation, pays out $100,000 as salary, and pays out the remainder of its earnings as dividends to its shareholder. GC's taxable income for the current year is $ 50,000, and GC's tax liability is $ 10,500 The shareholder's tax liability is $ 44,900 e. Assume that Raphael Genesis of 1121 Monroe Street, Ironton, OH 45638 is the owner of GC, which was operated as a proprietorship. Raphael is thinking about incorporating the business for next year and asks your advice. He expects about the same amounts of income and expenses and plans to take $100,000 per year out of the company whether he incorporates or not. Complete the letter to Raphael containing your recommendations. [Based on your analysis in (a), GC is operated as a proprietorship, and the owner withdraws $100,000 for personal use, and in (b), GC is operated as a corporation, pays out $100,000 as salary to its shareholder, and pays no dividends to its shareholder.]