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Company recognizes a long-term capital gain

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Jay owns 100% of Kaye Company. In 2011, Kaye Company recognizes a long-term capital gain (LTCG) of $100,000. Kaye Company has no other income or loss. Assume that Jay (an individual) is in the 39.6% tax bracket and has no recognized capital gains or losses in 2011.

How much tax will Kaye Company owe on the $100,000 LTCG assuming that Kaye is a corporation?

Jay owns 100% of Kaye Company. In 2011, Kaye Company recognizes a long-term capital gain (LTCG) of $100,000. Kaye Company has no other income or loss. Assume that Jay (an individual) is in the 39.6% tax bracket and has no recognized capital gains or losses in 2011.

How much tax will Kaye Company owe on the $100,000 LTCG if Kaye Company is a sole proprietorship?

Jay owns 100% of Kaye Company. Jay (an individual) is in the 39.6% tax bracket. Assume that Kaye Company is a corporation and distributes $50,000 cash to Jay as a dividend.

How much tax must Jay pay on this $50,000 dividend?

Jay owns 100% of Kaye Company. Jay (an individual) is in the 39.6% tax bracket. Assume that Kaye Company is a sole proprietorship and distributes $50,000 of cash to Jay.

How much tax must Jay pay on this $50,000 distribution?

Reference no: EM131501081

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