Question: Torsten owns 100 of Taupe Corporation which had net operating

Torsten owns 100% of Taupe Corporation, which had net operating income of $420,000 and long-term capital gain of $30,000 in 2015. Torsten has sufficient income from other sources to be in the 39.6% marginal tax bracket without regard to the results of Taupe Corporation. The corporation makes no distributions to Torsten during the year. Ignoring the 3.8% Medicare surtax on net investment income, explain the tax treatment if Taupe Corporation is:
a. An S corporation.
b. A C corporation.

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  • CreatedSeptember 09, 2015
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