Samantha Johnson owns Skylark Bakery, a sole proprietorship, which generates an annual operating profit of $100,000. In addition, the bakery earns annual dividends of $5,000 from investing excess working capital in the stock of publicly traded corporations. Samantha is in the 37% marginal tax rate bracket irrespective of the bakery.?

In the past, Samantha has withdrawn $50,000 annually from the bakery. If Samantha conducts the business as a regular C corporation, what would be the annual income tax savings (or cost)?

For purposes of this analysis, use the 2019 tax rates and ignore any employment tax or state tax considerations.?

Answer rating: 100% (QA)

SKYLARK BAKERS OPERATED ns OPERATING PROFIT 100000 T... View the full answer