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Requlred Informetlon Problem 15-46 (LO 15-3) [The following information applies to the questions displayed below Amanda would like to organize BAL as either an LLC
Requlred Informetlon Problem 15-46 (LO 15-3) [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 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 dividends and capital gains is 23.8 percent (including the 3.8 percent net investment income tax). If Amanda organizes BAL as an LLC, she il be required to pay an additional 29 percent for self-employment tax and arn additional 0.9 percent for the additional Medicare tax. Also, she is eligible to claim a full deduction for qualified business income on BAL's income. Assume that BAL will distribute half of its after-tax earnings every year as a dividend if it is formed as a C corporation. (Round your Intermedlate computatlons to the nearest whole doller amount.) Problem 15-46 Part a a. How much cash after taxes would Amanda receive from her investment in the first year if BAL is organized as either an LLC or a C corporation? Answer is complete but not entirely correct. After-tax cash 25,200 19,202 flow LLC corporation
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