Amanda would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, theentity is expected to generate an 8 percent annual before-tax return on a $500,000 investment. Amanda's marginalincome tax rate is 37 percent, and her tax rate on qualified dividends and net capital gains is 20%. Assume that BAL willdistribute half of its after-tax earnings every year as a dividend if it is formed as a C corporation. Assume the income is noteligible for the QBI deduction. Further, when computing your answers, include the self-employment tax (use a 2.9%marginal rate for self-employment income because Amanda has salary over $147,000 from her employer) but not theadditional Medicare tax or the net investment income tax.a. How much cash after taxes would Amanda receive from her investment in the first year if BAL is organized as an LLC? What if BAL isorganized as a C corporation?Note: Round Intermediate calculations and your final answers to the nearest whole dollar.Answer is complete but not entirely correct.After-tax cashflowLLCсcorporation$$24,46721,026

Tax Tax refers to mandatory obligations on any individual or entity by any government agency. There…

entity is expected to generate an 8 percent annual before-tax return on a $500,000 Investme income tax rate is 37 percent, and her tax rate on qualified dividends and net capital gains is 2 distribute half of its after-tax earnings every year as a dividend if it is formed as a C corporatio eligible for the QBI deduction. Further, when computing your answers, include the self-employ marginal rate for self-employment Income because Amanda has salary over $147,000 from he additional Medicare tax or the net investment income tax. v much cash after taxes would Amanda receive from her investment in the first year if BAL is o ized as a C corporation? Round Intermediate calculations and your final answers to the nearest whole dollar. nswer is complete but not entirely correct. After-tax cash flow = ation $ S 399 24,467 21,026

entity is expected to generate an 8 percent annual before-tax return on a $500,000 Investme income tax rate is 37 percent, and her tax rate on qualified dividends and net capital gains is 2 distribute half of its after-tax earnings every year as a dividend if it is formed as a C corporatio eligible for the QBI deduction. Further, when computing your answers, include the self-employ marginal rate for self-employment Income because Amanda has salary over $147,000 from he additional Medicare tax or the net investment income tax. v much cash after taxes would Amanda receive from her investment in the first year if BAL is o ized as a C corporation? Round Intermediate calculations and your final answers to the nearest whole dollar. nswer is complete but not entirely correct. After-tax cash flow = ation $ S 399 24,467 21,026

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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