Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 11AP
a.
To determine
Calculate the tax burden for Situation A.
b.
To determine
Calculate the tax burden for Situation B.
c.
To determine
Calculate the tax burden for Situation C.
d.
To determine
Calculate the tax burden for Situation D.
e.
To determine
Calculate the tax burden for Situation E.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Inc., which manufactures greeting cards. Toto’s average annual net profit (before deduction of Mr. Lion’s salary) is $410,000. For each of the following cases, compute the income tax burden on this profit. Assume that all dividends are taxed to individuals at a 20% tax rate. (Ignore any payroll tax consequences.)
Required:
Toto is a C Corporation subject to a 21% tax rate. Mr. Lion’s salary is $100,000, and Toto pays no dividends.
Toto is a C Corporation subject to a 21% tax rate. Mr. Lion’s salary is $100,000, and Toto distributes its after-tax income as a dividend.
Toto is an S corporation. Mr. Lion’s salary is $100,000, and Toto makes no cash distributions. Assume Toto's ordinary income qualifies for the 20 percent QBI deduction, subject to no limitations.
Toto is an S corporation. Mr. Lion draws no salary, and Toto makes no cash distributions. Assume Toto's ordinary income qualifies for the 20…
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Inc., which manufactures greeting cards. Toto's average
annual net profit (before deduction of Mr. Lion's salary) is $440,000. For each of the following cases, compute the income tax burden
on this profit. Assume that all dividends are taxed to individuals at a 20% tax rate. (Ignore any payroll tax consequences.)
Required:
a. Toto is a C Corporation subject to a 21% tax rate. Mr. Lion's salary is $100,000, and Toto pays no dividends.
b. Toto is a C Corporation subject to a 21% tax rate. Mr. Lion's salary is $100,000, and Toto distributes its after-tax income as a dividend.
c. Toto is an S corporation. Mr. Lion's salary is $100,000, and Toto makes no cash distributions. Assume Toto's ordinary income
qualifies for the 20 percent QBI deduction, subject to no limitations.
d. Toto is an S corporation. Mr. Lion draws no salary, and Toto makes no cash distributions. Assume Toto's ordinary income qualifies for
the…
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Incorporated, which manufactures greeting cards. Toto’s average annual net profit (before deduction of Mr. Lion’s salary) is $200,000. For each of the following cases, compute the income tax burden on this profit. (Ignore any payroll tax consequences.)
Mr. Lion’s salary is $100,000, and Toto pays no dividends.
Mr. Lion’s salary is $100,000, and Toto distributes its after-tax income as a dividend.
My solutions: 1. $58,000, 2. $87,230
This was a homework problem that I missed. Could you please explain how to do it correctly?
Chapter 12 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 12 - Mr. and Mrs. Velotta are self-employed...Ch. 12 - Prob. 2QPDCh. 12 - Ms. Johnson is eager to create a family...Ch. 12 - Discuss the tax and nontax reasons why the stock...Ch. 12 - Mr. Eros operates an antique store located on the...Ch. 12 - Prob. 6QPDCh. 12 - Prob. 7QPDCh. 12 - Prob. 8QPDCh. 12 - Prob. 9QPDCh. 12 - Prob. 10QPD
Ch. 12 - Prob. 11QPDCh. 12 - Ms. Knox recently loaned 20,000 to her closely...Ch. 12 - Explain the logic of the tax rate for both the...Ch. 12 - Prob. 14QPDCh. 12 - Prob. 15QPDCh. 12 - Prob. 16QPDCh. 12 - Mr. Tuck and Ms. Under organized a new business as...Ch. 12 - Grant and Marvin organized a new business as a...Ch. 12 - Prob. 3APCh. 12 - Ms. Kona owns a 10 percent interest in Carlton...Ch. 12 - Mrs. Franklin, who is in the 37 percent tax...Ch. 12 - Prob. 6APCh. 12 - Prob. 7APCh. 12 - Prob. 8APCh. 12 - Prob. 9APCh. 12 - Prob. 10APCh. 12 - Prob. 11APCh. 12 - Prob. 12APCh. 12 - Prob. 13APCh. 12 - Ms. Xie, who is in the 37 percent tax bracket, is...Ch. 12 - Prob. 15APCh. 12 - In 1994, Mr. and Mrs. Adams formed ADC by...Ch. 12 - Prob. 17APCh. 12 - Prob. 18APCh. 12 - Prob. 19APCh. 12 - Prob. 20APCh. 12 - Prob. 21APCh. 12 - Prob. 1IRPCh. 12 - Prob. 2IRPCh. 12 - Prob. 3IRPCh. 12 - REW Inc. is closely held by six members of the REW...Ch. 12 - Prob. 5IRPCh. 12 - Prob. 6IRPCh. 12 - Prob. 7IRPCh. 12 - Prob. 8IRPCh. 12 - Prob. 9IRPCh. 12 - Prob. 10IRPCh. 12 - Prob. 2TPCCh. 12 - Prob. 3TPC
Knowledge Booster
Similar questions
- Sheila, a single taxpayer, is a retired computer executive with a taxable income of 100,000 in the current year. She receives 30,000 per year in tax-exempt municipal bond interest. Adam and Tanya are married and have no children. Adam and Tanyas 100,000 taxable income is comprised solely of wages they earn from their jobs. Calculate and compare the amount of tax Sheila pays with Adam and Tanyas tax. How well does the ability-to-pay concept work in this situation?arrow_forwardMr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Inc. which manufactures greeting cards. Toto's average annual net profit (before deduction of Mr. Lion's salary) is $270,000. For each of the following cases, compute the income tax burden on this profit. Assume that all dividends are taxed to individuals at a 20% tax rate. (Ignore any payroll tax consequences) Required: a. Mr. Lion's salary is $100.000, and Toto pays no dividends. b. Mr. Lion's salary is $100,000, and Toto distributes its after-tax income as a dividend. c. Toto is an S corporation. Mr. Lion's salary is $190.000, and Toto makes no cosh distributions. Assume Toto's ordinary income qualifies for the 20 percent QBI deduction, sullject to no limitations. d. Toto is an S corporation. Mr. Lion draws no salary, and Toto makes no cash distributions. Asume Toto's ordinary income quelifies for the 20 percent QBI deduction, subject to no limitations. e. Toto is on S corporation. Mr. Lion draws no…arrow_forwardThis year Lloyd, a single taxpayer, estimates that his tax liability will be $13,300. Last year, his total tax liability was $17,200. He estimates that his tax withholding from his employer will be $9,890. a. How much does Lloyd need to increase his withholding by (for the year), in order to avoid the underpayment penalty? b. Assuming Lloyd does not make any additional payments, what is the amount of his underpayment penalty? Assume the federal short-term rate is 5 percent. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Dates Actual withholding Required withholding Over (under withheld Penality per quater April 15th June 15th Sept. 15th Jan. 15th Total ------------------------------arrow_forward
- Lynette is the CEO of publicly traded TTT Corporation and earns a salary of $272,500 in the current year. What is TTT Corporation’s after-tax cost of paying Lynette’s salary excluding FICA taxes?arrow_forwardJames, who is in the 35 percent marginal tax bracket with a 15 percent tax rate on dividends, owns 100 percent of the stock of JJ Inc. This year, JJ generates $306,000 taxable income and pays a $61,200 dividend to James. Compute his tax on the dividend under each of the following assumptions: Required: The federal tax rules currently in effect apply to the dividend payment.arrow_forwardThis year Lloyd, a single taxpayer, estimates that his tax liability will be $13,000. Last year, his total tax liability was $17,0 He estimates that his tax withholding from his employer will be $9,700. Required: a. How much does Lloyd need to increase his withholding by (for the year), in order to avoid the underpayment penalty b. Assuming Lloyd does not make any additional payments, what is the amount of his underpayment penalty? Assume short-term rate is 5 percent. Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Complete this question by entering your answers in the tabs below. Required A Required B Assuming Lloyd does not make any additional payments, what is the amount of his underpayment penalty? Assume the federal short-term rate is 5 percent. Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Required Withholding Penalty Per Quarter Dates April 15th June 15th September 15th January 15th Total…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
