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Sean, a shareholder of Crimson Corporation, is single and in the 3 5 % tax bracket. This year, he receives a $ 7 , 0

Sean, a shareholder of Crimson Corporation, is single and in the 35% tax bracket. This year, he receives a $7,000 qualified dividend from Crimson. Sean has investment interest expense of $16,000 snd net investment income of $9,000(not including the qualified dividend). Assume that Sean does not expect to have any investment income in the forseeable future and the preferential tax rate is 15%.
Complete the following statements to determine if Sean should treat the distribution as a qualified dividend (subject to a 15% tax rate) or classify it as net investment income.
Excluding the dividend from net investment income yields a current-year tax of $1,050 and a tax savings in the future of _____ for Sean.

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