Blue is the owner of all of the shares of an S corporation, and Blue is considering receiving a salary of $110,000 from the business. She will pay the 7.65% FICA taxes on the salary, and the S corporation will pay the same amount of FICA tax. If Blue reduces her salary to $50,000 and takes an additional $60,000 as a cash distribution, how would her Federal income tax liabilities change?
Answer to relevant QuestionsOrange, Inc., a calendar year corporation in Clemson, South Carolina, elects S corporation status for 2015. The company generated a $74,000 NOL in 2014 and another NOL of $43,000 in 2015. Orange recorded no other ...Compare C and S corporations as to the taxation of the entity and its owners. Arnold is going to conduct his business in corporate form. What factors should he consider in deciding whether to operate as a C corporation or as an S corporation? Entity liabilities have an effect on a partner's basis in the partnership interest. Yet entity liabilities do not have any effect on a corporate shareholder's stock basis (for either a C corporation or an S corporation). ...Roscoe contributes a personal use asset with an adjusted basis of $15,000 and a fair market value of $28,000 on the contribution date. Determine if any gain or loss is recognized and the basis under the following ...
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