LO.3, 4 Flower, Inc., a C corporation, has taxable income of $800,000 for 2012. It has used up the accumulated earnings credit and has no additional “reasonable needs of the business” for the current tax year. Determine the total potential tax liability for Flower:

a. If it declares no dividends.

b. If it declares and pays dividends equal to the after-tax earnings.

c. In

(a) and

(b) if Flower is an S corporation.