Potato, an individual, is a 20 percent owner of Starch LLC. This year, Potato was allocated $45,000 of ord LLC, $1,000 of tax-exempt interest income, and $2,000 of nondeductible expenses. Potato also received Starch LLC this year. At the beginning of the year, Starch LLC had outstanding debt of $100,000. At the em outstanding debts increased to $130,000. Required:
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- 9 Part 1 of 2 1.9 points [The following information applies to the questions displayed below.] Sandra would like to organize LAB (a legal corporation) as either an S corporation or a C corporation for tax purposes. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $875,000 investment. Sandra's marginal income tax rate is 37 percent and her tax rate on qualified dividends and net capital gains is 20 percent. LAB's income is not qualified business income (QBI), so Sandra is not allowed to claim the QBI deduction. Assume that LAB will distribute all of its earnings after entity-level taxes every year. Ignore the additional Medicare tax and the net investment income tax when computing your answers. Note: Round your intermediate computations to the nearest whole dollar amount. Problem 04-51 Part a (Algo) a. How much cash after taxes would Sandra receive from her investment in the first year if LAB is organized as either an S corporation or a C…TABLE 3.6 Personal tax rates, 2022. Taxable Income ($) Single Taxpayers Married Taxpayers Filing Joint Returns Tax Rate (%) 0-9,950 0-19, 900 10 % 9,950-40, 525 19,900-81, and above 628, 300 and above 37% \\\ You have set up your tax preparation firm as an incorporated business. You took $80,000 from the firm as your salary. The firm's taxable income for the year (net of your salary) was $30,000. Assume you pay personal taxes as an unmarried taxpayer. Use the tax rates presented in Table 3.6. How much tax must be paid to the federal government, including both your personal taxes and the firm's taxes? By how much will you reduce the total tax bill if you cut your salary to $50,000, thereby leaving the firm with taxable income of $60,000? What allocation will minimize the total tax bill? Hint: Think about marginal tax rates and the ability to shift income from a higher marginal bracket to a lower one. Note: Do not round your intermediate calculations. Round your final answers to nearest…Marginal tax rates Partner A, a single taxpayer, is one of two partners in a small business. As such, she receives pass-through income that is taxed at her personal tax rates. After all adjustments and deductions have been made, including the 20% qualified business income deduction, she is preparing to calculate her taxes owed for the year. a. Find the marginal tax rate for the following levels of sole proprietorship earnings before taxes: $16,300; $61,200; $91,700; $151,000; $253,000; $451,000; and $1.1 million. b. Plot the marginal tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis).Explain the relationship between these variables. Chart is attached. I need help solving thank you
- Question 12 Georgina Rockwell, an unmarried person, is a partner in a law firm. She receives a guaranteed payment of $200,000 and a pass-through profit share of $100,000. Describe the correct tax treatment regarding the Qualified Business Income Deduction is Georgina's case. She is entitled to a Qualified Business Income Deduction equal to 20% of Qualified Business Income She is entled to a Qualified Business Income Deduction equal to 20% of Modified Taxable Income She is entitled to a reduced Qualified Business Income Deduction (below the lesser of 20% of Qualified Business Income or 20% of modified taxable income) She is not entitled to a Qualified Business Income Deduction Question 13 Rupert Davis, an unmarried person, is a part owner of an S corporation that operates multiple food trucks. He receives compensation of $30,000 and a pass-through profit share of $80,000. He also has significant income outside of the business. His modified taxable income (before the QBI deduction) is…Problem: Module 7 Textbook Problem 9 Learning Objectives: • 7-6 Adjust the tax basis in a partnership interest • 7-7 Apply the basis limitation on the deduction of partnership losses • 7-9 Identify similarities and differences in the tax treatment of S corporations versus partnerships At the beginning of Year 1 Ms. Mushroom, an individual, purchased a 20 percent interest in Fungi Partnership for $22,000. Ms. Mushroom's Schedule K-1 reported that her share of Fungi's debt at year-end was $29,000, and her share of ordinary loss was $46,600. On January 1, Year 2, Ms. Mushroom sold her interest to another partner for $3,700 cash. Required: a. How much of her share of Fungi's loss can Ms. Mushroom deduct on her Year 1 tax return? b. Compute Ms. Mushroom's recognized gain on sale of her Fungi Partnership interest. c. How would your answers to parts a and b change if Fungi were an S corporation instead of a partnership? Complete this question by entering your answers in the tabs below.…Activity 3 Use the following information for the next two questions. Write your answer on a separate sheet of paper. Mr Danny earns the following business income in a taxable year. Sales P 3,900,000 Sales returns and discounts 100,000 Inventory, beg. 30,000 Purchases 1,800,000 Operating expenses (itemized deductions) 780,000 Inventory, end. 80,000 1. How much is the tax due if Mr Danny chose the option to use the itemized deductions? _____________ 2. How much is the tax due if Mr Danny chose the option to use the optional standard deduction? _____________ Assessment 3 Use the following information
- Return to question Given the following tax structure: Salary $ 40,500 Taxpayer Total Tax $ 2,349 Pedro 000 ES $ a. What is the minimum tax that Pedro should pay to make the tax structure vertically equitable with respect to the amount of tax paid? X Answer is complete but not entirely correct. $3,074 b. This would result in what type of tax rate structure? Answer is complete and correct. Tax rate structure Regressive 5:03 AM x> ツ 10/26/2021 61°F to search N4Module 2: Filing Requirements Question 3 of 15. Joseph and Lorena are married and lived together for the entire year in California. Joseph earned $44,000 in wages, and Lorena eamed $20,000 in wages. They will file separ his separate federal and California tax returns? Ⓡ $20,000 $32,000 $44,000 $54,000 Mark for follow upIndividuals Schedule X-Single The tax is $11.000 Chuck, a single taxpayer, earns $79,200 in taxable income and taxable income in over. But not over $15,000 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.) 10% of taxable income $ 44,725 $1,100 plus 12% of the excess over $11,000 $95,375 $5,147 plus 22% of the excess over $44,725 $182,100 $16,290 plus 24% of the excess over $95,375 $231,250 $37,104 plus 32% of the excess over $152.100 $578,125 $52,832 plus 35% of the excess over $231,250 | $174,258.25 plus 37% of the excess over $578,12 Required: a. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income? b. What is his marginal rate if, instead, he had $40,000 of additional deductions? Note: For all requirements, do not round intermediate calculations. Round percentage answers to 2 decimal places. a. Marginal tax rate b. Marginal tax rate 24.00 % 22.00 % $ 11,000 $ 44,725 $ 95,375 $182,100 $231.250…
- QUESTION 23 During the year of 2021, Bradford Corporation, an S Corporation has a recognized Built-in Gain of $80,000 and Taxable Income if it were a Regular (9 Corporation of $95,000. The Built-in Gains Tax (Section 1374 of the Internal Revenue Code) of Bradford Corporation for the year of 2021 is: O $33,250. $28,000. O $61,250. • $16,800.Problem 11-6 Special Deductions and Limitations (LO 11.3) Beech Corporation, an accrual-basis, calendar-year taxpayer, was organized and began business in May of the current calendar tax year. During the current year, the corporation incurred the following expenses: State fees for incorporation $ 800 Legal and accounting fees incident to organization 5,500 Expenses for the sale of stock 2,500 1,000 Organizational meeting expenses Round your answer to 2 decimal places. Assuming that Beech Corporation wishes to deduct organizational expenses as quickly as possible, calculate the corporation's deduction for its current calendar tax year.Subject income tax Nicole and Nicolas, CPAs, a partnership of Certified Public Accountants, had a gross receipt of P220,000 and expenses of 85,000 in 2019:Nicole NicolasShare in profit and loss ratio 75% 25%Income from other business P125,000 P325,000Expenses 80,000 190,000Amount withdrawn partnership 30,000 12,500The income tax payable by the partnership usa. P75,000 b. P45,900 c. P44,550 d. None