Blue, Inc., has taxable income before salary payments to its president of $700,000 in 2009. Blue...
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Blue, Inc., has taxable income before salary payments to its president of $700,000 in 2009. Blue is in the 34% tax bracket, and the president is in the 35% tax bracket. a. Calculate the tax liability to Blue if the president's salary is $400,000 and if it is $100,000. b. What tax benefit is there of paying the larger salary to the president? c. What negative tax result may occur associated with the payment of the higher salary? Blue, Inc., has taxable income before salary payments to its president of $700,000 in 2009. Blue is in the 34% tax bracket, and the president is in the 35% tax bracket. a. Calculate the tax liability to Blue if the president's salary is $400,000 and if it is $100,000. b. What tax benefit is there of paying the larger salary to the president? c. What negative tax result may occur associated with the payment of the higher salary?
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a Taxable income before salary 700000 700000 Salary 400000 100000 Taxable income 300000 600000 Tax l... View the full answer
Related Book For
South-Western Federal Taxation 2019 Comprehensive
ISBN: 9781337703017
42th edition
Authors: David M. Maloney, William A. Raabe, William H. Hoffman, James C. Young
Posted Date:
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