Several years ago, Brian formed Sigma Corporation, a retail company ineligible for the U.S. production activities deduction. Sigma uses the accrual method of accounting. In 2015, the corporation reported the following items:

Gross Profit $290,000

Long-Term capitol gain 20,000

Tax-exempt interest recived 7,0000

Salary paid to Brian 80,000

Payroll tax on Brian's salary(Sigma's Share) 6,120

Depreciation ($21,000 for E&P purposes) 25,000

other operating expenses 89,000

Divedend distribution to Brian 60,000

In addition to owning 100% of Sigma's stock, Brian manages Sigma's business and earns the $80,000 salary listed above. This salary is an ordinary and necessary business expense of the corporation and is reasanable in amount. the payroll tax on Brian's $80,000 salary is $12,240, $6,120 of which Sigma pays and deducts , and the other $6,120 of which Brian pays through Social Security withholding. Brian is single with no dependents and claims the standard deduction.

A) Calculate Sigma's and Brian's 2015 Taxable income and the total tax liablity, as well as their combined tax liability. Also, calculate the corporation's current E&P after the dividend distribution.

B) Assume instead that Brian operates Sigma as a sole proprietorship. In the current year, the business reports the same operating results as above, and Brian withdraws $140,000 in lieu of the salary and dividend. Brian's self-employment tax is $19,408. Compute Brian's total tax liability for 2015.

C) Assume as a C corporation such as part a ditributes all of its after-tax earnings. Compare the tax treatment of long-term capitol gains, tas-exempt interest, and operating profits if earned by a C corporaiton with the tax treatment of these items if earned by a sole proprietorship.