How did the TCJA alter the relative preferences in terms of organizational form? Illustrate this using a simple example where a business has a pretax taxable income of $100 and operates:

a. A C corporation subject to a 21% tax rate, that pays out all after-tax earnings as dividends, and in which the shareholders are all taxable at 20% on qualified dividends and 37% on ordinary income

b. A pass-through that does not qualify for the QBI deduction

c. A pass-through that does qualify for the QBI deduction Tax-Planning Problems.

Answer rating: 100% (QA)

The Tax Cuts and Jobs Act TCJA implemented several changes that altered the relative preferences in terms of organizational form Lets illustrate this ... View the full answer