Purple Company records $200,000 in net income for 2019 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,200 standard deduction. 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.

Click here to access the 2019 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. If Purple is a proprietorship. Kirsten withdraws $50,000 from the business during the year; she claims a $37,560 deduction for qualified business income. Kirsten's taxable income is $, and her after-tax income is $.

b. Purple is a C corporation and 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 $38,600 of taxable income.

Purple Corporation's after-tax income is $ and Kristen's after tax income is $.

c. Purple is a C corporation and pays Kirsten a salary of $158,000. Kirsten's after-tax income is $.

2-

Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC records net income of $246,500 after deducting Robert's $73,950 salary. In addition to his compensation, ABC pays Robert dividends of $172,550.

a. What is Robert's qualified business income? $

b. What is Robert's qualified business income if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $163,950? $