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Sandra would like to organize LAB as either an LLC ( taxed as a sole proprietorship ) or a C corporation. In either form, the
Sandra would like to organize LAB 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. Sandra's marginal income tax rate is percent, and her tax rate on dividends and capital gains is percent including the percent net investment income tax If Sandra organizes LAB as an LLC she will be required to pay an additional percent for selfemployment tax and an additional percent for the additional Medicare tax. LAB's income is not qualified business income QBI so Sandra is not allowed to claim the QBI deduction. Assume that LAB will distribute all of its aftertax nearest whole dollar amount.
a How much cash after taxes would Sandra receive from her investment in the first year if LAB is organized as either an LLC or a C corporation?
tableAftertax cash flowLLCC corporation,
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