What is the overall tax rate on BAL income

Assignment Help Accounting Basics
Reference no: EM132642223

Question - Sandra 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 10 percent annual before-tax return on a $720,000 investment. Sandra's marginal income tax rate is 37 percent and her tax rate on dividends and capital gains is 23.8 percent (including the 3.8 percent net investment income tax). If Sandra organizes BAL as an LLC, she will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional Medicare tax. BAL's income is not qualified business income (QBI) so Sandra is not allowed to claim the QBI deduction. Assume that BAL will distribute all of its after-tax earnings every year as a dividend if it is formed as a C corporation.

Required - What is the overall tax rate on BAL's income in the first year if BAL is organized as an LLC or as a C corporation?

Reference no: EM132642223

Questions Cloud

What amount of tax will Little Rock Corp pay : What amount of tax will Little Rock Corp. pay on the $32,250 dividend it received from Marathon Inc. (50 percent dividends received deduction)
Find what was company earnings per share for each year : Find What was the company's earnings per share for each year? There were 77,120,000 shares outstanding at the end of 2020.
Systematic processes necessary to make bureaucracy : Classical Organizational Theory deals with the "systematic processes necessary to make bureaucracy more efficient and effective."
How state constitution addresses the role of public official : After reviewing the Georgia State Constitution and discuss how the State Constitution addresses the role of public officials impacting public programs.
What is the overall tax rate on BAL income : Required - What is the overall tax rate on BAL's income in the first year if BAL is organized as an LLC or as a C corporation
Recent Federal Acts and Social Justice : The Patriot Act and the Homeland Security Act of the 21st Century form the foundation of the United States' domestic response to the terrorist attacks
How much cash after taxes would Sandra receive : How much cash after taxes would Sandra receive from her investment in the first year if BAL is organized as either an LLC or a C corporation
Show a statement of comprehensive income for july : Show a statement of comprehensive income for July. Purchased washing machines for NTS36,000. Snow White paid NTS5,000 signed a 60-day notes payable
Realistic understanding of context of evaluations : Evaluators need to have a realistic understanding of the context of evaluations, the political uses of evaluations, and the conditions under which information

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd