Question: Fill in the blanks on the chart. Everything else is correctAlbert owns 1 0 0 % of A Corporation, Betty is the sole proprietor of
Fill in the blanks on the chart. Everything else is correctAlbert owns of A Corporation, Betty is the sole proprietor of B Company, and Cai is the sole proprietor of C Company.
Each business generated $ of taxable income and beforetax cash flow.
A Corporation and B Company produce a product, but C Company provides accounting services.
A Corporation will distribute $ of its aftertax income to Albert.
All three owners face a marginal tax rate on ordinary income.
B Company qualifies for the A deduction, but C Company does not because it provides accounting services and its
taxable income exceeds the threshold for that deduction.
Assume the tax rate applied to dividend income equals the top net longterm capital gain rate plus the net investment income tax rate. The corporate tax rate is and A deduction is
What will be the values of A Corporation, B Company, and C Company after three years? Assume that each business a required a $ initial investment, b earns an annual beforetax rate of return on the beginningoftheyear investment, c can reinvest its aftertax cash flow back into the business, and d there is no unrealized appreciation of their assets.
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