Need answer the question Suppose pre-tax earnings are $100,000.00 and the corporate taxrate is 42%. How much additional money can a business ownerreceive by declaring the earnings as personal income which istaxed at a rate of 31%?a. $11,000.00b. $42,000.00c. $31,000.00d. $3,200.00

Pre-tax earnings of a business owner is $100,000Corporate tax rate is 42% & personal income tax…

Answered: Suppose pre-tax earnings are…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter20: Corporations And Partnerships

Section: Chapter Questions

Problem 6DQ: LO.3, 4, 5 Contrast the income taxation of individuals and C corporations as to: a. Alternative...

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Suppose pre-tax earnings are $100,000.00 and the corporate tax rate is 42%. How much additional money can a business owner receive by declaring the earnings as personal income which is taxed at a rate of 31%? a. $11,000.00 b. $42,000.00 c. $31,000.00 d. $3,200.00