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Required information [ The following information applies to the questions displayed below. ] Amanda would like to organize BAL as either an LLC ( taxed
Required information
The following information applies to the questions displayed below.
Amanda would like to organize BAL as either an LLC taxed as a sole proprietorship or a C corporation. In either form, the
entity is expected to generate an percent annual beforetax return on a $ investment. Amanda's marginal
income tax rate is percent, and her tax rate on qualified dividends and net capital gains is Assume that BAL will
distribute half of its aftertax 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 selfemployment tax use a
marginal rate for selfemployment income because Amanda has salary in excess of the wage base limit but not the
additional Medicare tax or the net investment income tax.
b What is the overall tax rate on BAL's income in the first year if BAL is organized as an LLC or as a C corporation?
Note: Round intermediate calculations to the nearest whole dollar. Round your final answers to decimal places.
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