For the current year, Maple Corporation, a C corporation, reports taxable income of $200,000 before paying salary

Question:

For the current year, Maple Corporation, a C corporation, reports taxable income of $200,000 before paying salary to its sole shareholder Diane. Diane's marginal tax rate on ordinary income is 35 percent and 15 percent on dividend income. If Maple pays Diane a salary of $150,000 but the IRS determines that Diane's salary in excess of $80,000 is unreasonable compensation, what is the amount of the overall tax (corporate level + shareholder level) on Maple's $200,000 pre-salary income (ignore the net investment income tax)? Assume Maple's tax rate is 35 percent and it distributes all after-tax earnings to Diane.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...