Problem: Module 9 Textbook Problem 8 Learning Objectives: - 9.4 Explain tax and nontax considerations in choosing a passthrough entity form - 9-6 Explain why individuals once again can use corporations as tax shelters Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto inc, which manufactures greeting cards. Toto's average annual net profit (before deduction of Mr. Llon's salary) is $250,000. For each of the following cases, compute the income tax burden on this profit. Assume that all cividends are taxed to individuals at a 20% tax rate. (lgnore any payroll tax consequences.) Required: a. Toto is a C Corporation subject to a 21% tax rate. Mr. Lion's salary is $100,000, and Toto pays no dividends. b. Toto is a C Corporation subjsct to a 21% tax rate. Mr. Lion's salary is $100,000, and Toto distributes its after-tax incorne as a dividend. c. Toto is an S corporation. Mr, Lion's salary is $100,000, and Toto makes no cash distributions. Assume Totos ordinary income qualfies for the 20 percent QBt deduction, subject to no limitations. d. Toto is an S corporation. Mr, Lion draws no salary, and Toto makes no cash distributions. Assume Toto's ordinary income qualifies for the 20 percent QBI deduction, subject to no limitations. e. Toto is an 5 corporation. Mr. Lion draws no salary, and Toto makes cash distributions of all ins income to Mr. Lion. Assume Toto's ordinary income qualifles for the 20 percent Qi deduction, subject to no limitabions