Biolsi Corporation, a C corporation, has one shareholder, Donna. Bioli earned $300,000 net profit during the...

 

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Biolsi Corporation, a C corporation, has one shareholder, Donna. Biolşi earned $300,000 net profit during the current year and distributed $180,000 to Donna. Biolsi has a total of $105,000 of Earnings and Profits. Donna's basis in her stock is $100,000. Assume that Biolsi's tax rate is 30%. Also assume that Donna's marginal tax rate are 25% therefore the dividend rate would be 15%. What is the impact based on these facts to Biolsi and Donna? Explain your answer How would your answer change if this was an S corporation? Note, that with an S Corp, net income increases the basis of the shareholders therefore Donna's basis would be $400,000 prior to any distributions. Explain your answer Biolsi Corporation, a C corporation, has one shareholder, Donna. Biolşi earned $300,000 net profit during the current year and distributed $180,000 to Donna. Biolsi has a total of $105,000 of Earnings and Profits. Donna's basis in her stock is $100,000. Assume that Biolsi's tax rate is 30%. Also assume that Donna's marginal tax rate are 25% therefore the dividend rate would be 15%. What is the impact based on these facts to Biolsi and Donna? Explain your answer How would your answer change if this was an S corporation? Note, that with an S Corp, net income increases the basis of the shareholders therefore Donna's basis would be $400,000 prior to any distributions. Explain your answer

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Impact on Biolsi and Donna Biolsi Taxable income 300000 net profit Corporate tax 90000 30 x 300000 A... View the full answer