Fill In The Blanks. Please see attached In the current year, Azure Company has $350,000 of net operating income before deducting any compensation or other payment to its soleowner, Sasha. In addition, Azure has interest on municipal bonds of $25,000. Sasha has significant income from other sources and is in the37% marginal tax bracket.Based on this information, determine the income tax consequences to Azure Company and to Sasha during the year for each of thefollowing independent situations. (Ignore the deduction for qualified business income and the 3.8% Medicare surtax on net investmentincome.)The rates on qualified dividends are 0%, 15% and 20%.If an amount is zero, enter "0".a. Azure is a C corporation and pays no dividends or salary to Sasha.Azure Company, as a C corporation, has taxable income of $and corporate income tax of $Sasha hastaxable income of $from Azure.b. Azure is a C corporation and distributes $75,000 of dividends to Sasha.Azure Company has taxable income of $and corporate income tax of $Sasha incurs income tax ofwith respect to the dividends.c. Azure is a C corporation and pays $75,000 of salary to Sasha. (Ignore payroll taxes.)The salary paid to Sashadeductible by Azure Company resulting in taxable income of $and c. Azure is a C corporation and pays $75,000 of salary to Sasha. (Ignore payroll taxes.)The salary paid to Sashadeductible by Azure Company resulting in taxable income of $andcorporate income tax of $. Sasha incurs income tax of $with respect to the salary she received duringthe year.d. Azure is a sole proprietorship, and Sasha withdraws $0. (Ignore self-employment taxes.)ThereFederal income tax applicable to businesses formed as sole proprietorships. Sasha incurs income tax ofwith respect to Azure Company.e. Azure is a sole proprietorship, and Sasha withdraws $75,000. (Ignore self-employment taxes.)ThereFederal income tax applicable to businesses formed as sole proprietorships. Sashaраytax on the income of Azure Company,the amount she withdraws.

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SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 32P

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In the current year, Azure Company has $350,000 of net operating income before deducting any compensation or other payment to its sole owner, Sasha. In addition, Azure has interest on municipal bonds of $25,000. Sasha has signifi- cant income from other sources and is in the 37% marginal tax bracket. Based on this information, determine the income tax consequences to Azure Company and to Sasha during the year for each of the following independent situations. (Ignore the deduction for qualified business income and the 3.8% Medicare surtax on net investment income.) **Part 4 and 5 answered through bartleby Azure is a C corporation and pays no dividends or salary to Sasha. Azure is a C corporation and distributes $75,000 of dividends to Sasha. Azure is a C corporation and pays $75,000 of salary to Sasha.
In the current year, Azure Company has $350,000 of net operating income before deducting any compensation or other payment to its sole owner, Sasha. In addition, Azure has interest on municipal bonds of $25,000. Sasha has signifi- cant income from other sources and is in the 37% marginal tax bracket. Based on this information, determine the income tax consequences to Azure Company and to Sasha during the year for each of the following independent situations. (Ignore the deduction for qualified business income and the 3.8% Medicare surtax on net investment income.) 3. Azure is a sole proprietorship, and Sasha withdraws $0. 4. Azure is a sole proprietorship, and Sasha withdraws $75,000.
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Fill In The Blanks. (See attached Image)
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