Madden is a 100-percent owner of MD LLC (taxed as an S corporation). He works full time for MD and his marginal ordinary tax rate is 37 percent. Which of the following statements is true regarding Madden's tax treatment of business income allocated to him from MD? Question 10 options: Business income allocations are subject to self-employment tax. Business income allocations are not subject to the net investment income tax. Business income allocations are subject to the additional Medicare tax. Business income allocations are taxed at a maximum 23.8 percent tax rate.

This case provides that Madden is a 100% owner of MD LLC ( taxed as an S corporation). and it works…

Answered: Madden is a 100-percent owner of MD LLC…

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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Madden is a 100-percent owner of MD LLC (taxed as an S corporation). He works full time for MD and his marginal ordinary tax rate is 37 percent. Which of the following statements is true regarding Madden's tax treatment of business income allocated to him from MD?

Question 10 options:

	Business income allocations are subject to self-employment tax.
	Business income allocations are not subject to the net investment income tax.
	Business income allocations are subject to the additional Medicare tax.
	Business income allocations are taxed at a maximum 23.8 percent tax rate.

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