Assignment: Complete the spreadsheet. You should have numbers for every box. Then compare the after-tax wealth using the LLC form versus the C form. Assumptions 1. Corporation reinvests all income after paying corporate taxes, pays no dividends, and liquidates at end of investent life. 2. The first year numbers are filled in, but try to use formulas that you can apply to the other years. 3. LLC distributes enough cash each year so LLC investors can pay their individual taxes, all other income is reinvested in the LLC, LLC liquidates at the end of the investment life. 4. All of the pretax return results in taxable income each year, i.e., there is no untaxed income or untaxed appreciation at the entity level. 5. Assume the tax rates, investment life, and pretax return, given below. However, your spreadsheet should be designed so that you can evaluate the C vs. LLC decision using different tax rates and pretax returns. Parameters Investor ordinary tax rate0.40 Investor capital gains rate0.20 Corporate tax rate0.21 Pretax return0.10 Investment life (years)10.00 Amount invested$100 After tax accumlation, using formulas Partnership Corporation After tax accumulation, using spreadsheet (10 year investment life) LLC (10 year investment life) YearBeginning of Year AccumulationPretax incomeTaxable incomePartner taxReinvestedEnd of Year Accumulation 1100.0010.0010.003.966.04106.04 2106.04 3- 4- 5- 6- 7- 8- 9- 10- After tax payout to partners- C corporation ( 10 year investment life) YearBeginning of Year AccumulationPretax incomeCorporate taxReinvestedEnd of Year Accumulation 1100.0010.002.107.90107.90 2 3 4 5 6 7 8 9 10 Before shareholder tax payout- Shareholder's basis Capital gain Capital gains tax After shareholder tax payout