Required information

[The following information applies to the questions displayed below.] Andrea would like to organize SHO as either an LLC or as a C corporation generating an 4 percent annual before-tax return on a $320,000 investment. Assume individual and corporate tax rates are both 35 percent and individual capital gains and dividend tax rates are 15 percent. SHO will pay out its after-tax earnings every year as a dividend if it is formed as a C corporation. Assume Andrea is the sole owner of the entity. Ignore self-employment taxes, the additional Medicare tax, and the net investment income tax.

b. What are the overall tax rates if SHO is organized as either an LLC or as a C corporation? (Round your answers to 2 decimal places.)

LLC

C Corportation