Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $84,000 compensation for services he performs for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in KBS). After deducting Dave's compensation, KBS reports taxable income of $33,600. How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is formed as a C corporation, an S corporation, or a limited liability company (taxed as a partnership) (ignore the 0.9 percent additional Medicare tax)? (Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest whole dollar amount.) C Corporation S Corporation Limited liability company
Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $84,000 compensation for services he performs for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in KBS). After deducting Dave's compensation, KBS reports taxable income of $33,600. How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is formed as a C corporation, an S corporation, or a limited liability company (taxed as a partnership) (ignore the 0.9 percent additional Medicare tax)? (Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest whole dollar amount.) C Corporation S Corporation Limited liability company
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 25P
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Transcribed Image Text:Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $84,000 compensation for services he
performs for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in
management decisions for the entity (he was not a passive investor in KBS). After deducting Dave's compensation, KBS reports taxable
income of $33,600.
How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is
formed as a C corporation, an S corporation, or a limited liability company (taxed as a partnership) (ignore the 0.9 percent additional
Medicare tax)? (Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest
whole dollar amount.)
C Corporation
S Corporation
Limited liability company
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