Mr. and Mrs. Lund and their two children (Ben and June) are the four equal partners in LBJ Partnership. This year, LBJ generated $36,000 ordinary income. Compute the tax cost for the business if Mr. and Ms. Lund’s marginal rate is 33 percent, Ben’s marginal rate is 28 percent, and June’s marginal rate is 15 percent. (Ignore SE tax consequences.)
Answer to relevant QuestionsMs. Kona owns a 10 percent interest in Carlton LLC. This year, the LLC generated $72,400 ordinary income. Ms. Kona’s marginal tax rate is 33 percent, and she does not pay SE tax on her LLC income. a. Compute the tax cost ...Mr. Lion, who is in the 39.6 percent tax bracket, is the sole shareholder of Toto, which manufactures greeting cards. Toto’s average annual net profit (before deduction of Mr. Lion’s salary) is $200,000. For each of the ...Identify the tax issue or issues suggested by the following situations, and state each issue in the form of a question. Mr. and Mrs. Keck are in the highest marginal tax bracket. Their son, a first-year college student, ...Mr. and Mrs. Tinker own a sizeable investment portfolio of stock in publicly held corporations. The couple has four children, ages 20, 22, 25, and 27, with whom they want to share their wealth. Unfortunately, none of the ...Kantor Inc. owns 100 percent of Sub 1 (a CFC in a country with a 50 percent corporate tax) and 90 percent of Sub 2 (a CFC in a country with a 10 percent corporate tax). Kantor sells goods and services to both CFCs. Is the ...
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