The Brum Corporation, a C corporation, is owned 100% by john Bean :ind had taxable income in

Question:

The Brum Corporation, a C corporation, is owned 100% by john Bean :ind had taxable income in 2019 of $500,000. John is also an employee of the corporation. In December 2019, the corporation has decided to dim1bute $400,000 to john and has asked you whether it would be better to distribute the money as a dividend or salary. john, a single taxpayer, is in the 37% marginal tax bracket. How would you respond to Bruin Corporation? Consider only income taxes for this problem.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...

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