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Required Information

$[$The following informat$/$on applies to the questions displayed below.$]$

Amanda would like to organize BAL as elther an LLC $($taxed as a sole proprietorship$)$ or a C corporation. In elther form, the entity is

expected to generate an $8$ percent annual before$-$tax return on a $$500,000$ investment. Amanda's marginal income tax rate is $37$

percent, and her tax rate on qualified dividends and net capital gains is $20\%.$ Assume that BAL will distribute half of its after$-$tax

earnings every year as a dividend if it is formed as a C corporation. Assume the income is not eligible for the QBI deduction.

Further, when computing your answers, Include the self$-$employment tax $($use a $2\mathrm{.}9\%$ marginal rate for self$-$employment income

because Amanda has salary in excess of the wage base limit$)$ but not the additional Medicare tax or the net investment income

tax.

a$.$ How much cash after taxes would Amanda recelve from her investment in the first year if BAL is organized as an LLC$?$ What if BAL is

organized as a C corporation?

Note: Round Intermedlate calculations and your final answers to the nearest whole dollar.

Answer is not complete.Amanda would like to organize BAL as either an LLC or a C Corporation