Julio, age 50, is a U.S. citizen who has a 22% marginal tax rate. He has operated
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Julio, age 50, is a U.S. citizen who has a 22% marginal tax rate. He has operated the A&B Automotive Parts Company for a number of years as a C corporation. Last year, A&B reported $200,000 of pre-tax profits, from which it paid $50,000 in salary and $25,000 in dividends to Julio. The corporation expects this year's pretax profits to be $300,000. To date, the corporation has created no fringe benefits or pension plans for Julio. Julio asks you to explain whether an S corporation election would reduce his taxes. How do you respond to Julio's inquiry?
CorporationA 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...
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Global Taxation How Modern Taxes Conquered The World
ISBN: 9780192897572
1st Edition
Authors: Philipp Genschel, Laura Seelkopf
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