Answered: How much FICA and/or self-employment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Hadley and Huxley each owns 50 percent of Triple H. During the year, Huxley received $86,400 compensation for services he performed for Triple H during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in Triple H). After deducting Huxley's compensation, Triple H reported taxable income of $39,600.

How much FICA and/or self-employment tax is Huxley required to pay on her compensation and his share of the Triple H income if Triple H is formed as an LLC (taxed as a partnership)?

CORRECT ANSWER IS 15,006 (show steps to show how)

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Expert Solution

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions