Question
Taylor would like to organize DRK as either an LLC or as a C corporation generating a 20 percent annual before-tax rate of return on
Taylor would like to organize DRK as either an LLC or as a C corporation generating a 20 percent annual before-tax rate of return on a $400,000 investment. Individual tax rates are both 35 percent and individual capital gains and dividends tax rates are 18.8 percent. Corporate tax rates equal 21 percent. DRK will distribute its earnings annually to either its members or shareholders. Assume Taylor is eligible to claim the full deduction for qualified business income. If self-employment is applicable use 2.9 percent and an additional .9 percent for Medicare tax, what is the total amount of taxes paid if DRK is organized as a C Corp?
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