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Rick owns investments that generate $20,000 of ordinary income per year (4% annual before-tax rate of retum). Review the following parts of the problem:
Rick owns investments that generate $20,000 of ordinary income per year (4% annual before-tax rate of retum). Review the following parts of the problem: (Click the icon to view the parts) Requirement In each part, determine how much higher or lower Rick's after-tax income would be if he transfers the investments to his wholly-owned C corporation rather than owning them himself, assuming the corporation immediately distributes its after-tax income to Rick as a qualifying dividend Part a. Rick's marginal tax rate is 37% for ordinary income and 20% for qualified dividends. His investment income is subject to the 3.8% net investment income tax. (Round all calculations to the nearest whole number.) First calculate the after-tax income amounts After-tax income if Rick owns the investments himself After-tax income if Rick's C corporation owns the Investments
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