Problem 2-23 (LO. 1) Purple Company has $200,000 in net income for 2020 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,400 standard deduction for 2020. Purple Company is Kirsten's only source of income. Ignoring any employment tax considerations, compute Kirsten's after-tax income for each of the following situations. following situations. Click here to access the 2020 individual tax rate schedule to use for this problem. Assume the corporate tax rate is 21% When required, carryout intermediate tax computations to the nearest cent and then round your final tax liability to the nearest dollar. a. Purple Company is a proprietorship and Kirsten withdraws $50,000 from the business during the year; Kirsten claims a $37,520 deduction for qualified business income. Kirsten's taxable income is and her after-tax income is $ Accounting num b. Purple Company is a C corporation and the corporation pays out all of its after-tax income as a dividend to Kirsten. Note: Individual taxpayers received preferential treatment regarding the taxation of qualified dividends (0%,15%, 20%). For single taxpayers, the 0 percent rate applies to the first Kirsten's taxable income is and her after-tax income is $ b. Purple Company is a C corporation and the corporation pays out all of its after-tax income as a dividend to Kirsten. Note: Individual taxpayers received preferential treatment regarding the taxation of qualified dividends (0%, 15%,20%). For single taxpayers, the 0 percent rate applies to the first $40,000 of taxable income. Purple Corporation's after-tax income is $ and Kirsten's after tax income is $ c. Purple Company is a C corporation and the corporation pays Kirsten a salary of $158,000. Purple Corporation's after-tax income is $ and Kirsten's after-tax income is Check Previous Next