Owl is a closely held corporation owned by eight shareholders (each owns 12.5% of the stock). Its

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Owl is a closely held corporation owned by eight shareholders (each owns 12.5% of the stock). Its taxable income for the most recent year was $6,250,000. 

a. Calculate Owl’s Federal income tax liability if it is a C corporation. 

b. Calculate Owl’s Federal income tax liability if it is an S corporation. 

c. How would your answers in parts (a) and (b) change if Owl was not closely held (e.g., 5,000 shareholders with no shareholder owning more than 2% of the stock)?

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South-Western Federal Taxation 2020 Essentials Of Taxation Individuals And Business Entities

ISBN: 9780357109175

23rd Edition

Authors: Annette Nellen, James C. Young, William A. Raabe, David M. Maloney

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