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Taxation Question - Jordan is deciding between organizing his business, 23 Inc., as a C corporation or a single-member LLC (taxed as a partnership). Jordan
Taxation Question - Jordan is deciding between organizing his business, 23 Inc., as a C corporation or a single-member LLC (taxed as a partnership). Jordan will invest $150,000. 23 Inc. will then invest in a project that earns an annual pretax rate of return of 16%. The current corporate tax rate is 21%. Jordan's marginal tax rate on his personal ordinary income is 29.6%. His preferential rate on capital gains is 20%. He expects to liquidate 23 Inc. in 20 years. Part A What are Jordan's after-tax accumulation and annualized after-tax rate of return on this investment if he operates 23 Inc. as a C corporation? Part B As a single member LLC
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