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Required information [The following information applies to the questions displayed below] Tremaine would Ilke to organize UTA as either an S Corporation or a C

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Required information [The following information applies to the questions displayed below] Tremaine would Ilke to organize UTA as either an S Corporation or a C corporation. In either form, the entity will generate a 9 percent annual before-tax return on a $1,000,000 inventment. Tremaine's marginal income tax rate is 37 percent, and his tox rate on dividends and capital gains is 23.8 percent (including the net investment income tax). If Tremaine organizes UTA as an S corporation, he will be allowed to claim the deduction for qualified business income. Also, because Tremaine will participate in UTA's business activities, the income from UTA will not be subject to the net investment income tax. Assume that UTA will pay out 25 percent of its after-tax eamings every year as a dividend if it is formed as a C corporation. a. How much cash ofter taxes would Tremaine receive from his investment in the first year if UTA is organized elther as an S corporation or as a C corporation? Answer is complete but not entirely correct. Required information [The following information applies to the questions displayed below] Tremaine would like to organize UTA as either an S Corporation or a C corporation. In either form, the entity will generate a 9 percent annual before-tax return on a $1,000,000 investment. Tremaine's marginal income tax rate is 37 percent, and his tax rate on dividends and capital gains is 23.8 percent including the net investment income tax). If Tremaine organizes UTA as an S corporation, he will be allowed to claim the deduction for qualified business income. Also, because Tremaine will participate in UTA's business activities, the income from UTA will not be subject to the net investment income tax. Assume that UTA will pay out 25 percent of its after-tax earnings every year as a dividend if it is formed as a C corporation. b. What is the overall tax rate on UTA's income in the first year if UTA is organized as an S corporation or as a C corporation? Note: Round your final answere to 1 decimal place. Answer is complete but not entirely correct

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