Tr.27. The following information applies to the questions displayed below.] Amanda would like to organize BAL as either an LLC(taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 8 percent annualbefore-tax return on a $500,000 investment. Amanda's marginal income tax rate is 37 percent, and her tax rate onqualified dividends and net capital gains is 20%. Assume that BAL will distribute half of its after-tax earnings every year asa dividend if it is formed as a C corporation. Assume the income is not eligible for the QBI deduction. Further, whencomputing your answers, include the self-employment tax (use a 2.9% marginal rate for self-employment income becauseAmanda has salary over $147,000 from her employer) but not the additional Medicare tax or the net investment incometax.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 is organized as a C corporation? Note: Round intermediate calculations and your final answers to the nearestwhole dollar.cash flow left for LLC & C Corp

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

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10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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