Suppose an employer has a project that yields $ 4 0 0 , 0 0 0 of
Question:
Suppose an employer has a project that yields $ of net income in odd years and $ of net operating losses in even years.
In situation one, the employer is a corporation and they have
a tax rate of when the company has net income and when a company has a net loss; or
a tax rate of and NOLs can be carried back twoyears and forward indefinitely.
In situation two, the employer is a flowthrough entity and they have
a tax rate of when the company has net income and when a company has a net loss; or
a tax rate of and NOLs can be carried back twoyears and forward indefinitely.
The employer wants to hire you. However, you demand a salary of $ per year and your tax rate is in both situations because of your other income.
Part : What is the true cost to the employer if you are hired? Also, your employment contract is in increments of years ie etc.
Part : What amount of aftertax income are you demanding in both situations?
Part : What alternative strategy might the employer and you negotiate whereby one or both of you are better off but neither is worse off?
Intermediate Accounting
ISBN: 978-1118300855
10th Canadian Edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy