Sally is sole shareholder in TIP Technologies, Inc., a Ccorp. TIP Tech makes $1,000,000 in profit....
Sally is sole shareholder in TIP Technologies, Inc., a Ccorp. TIP Tech makes $1,000,000 in profit. It decides to re-invest most of it into growing the business but pays Sally a distribution of $100,000. How much total tax is paid to the federal government? (Assume corporate tax rate is 35% and individual rate is 20%.)
a. $350k c. $370k b. $200k d. $550k
Homework Answers
Corporate Tax = $1,000,000*35% = $350,000
Individual Tax = $100,000*20% = $20,000
Total tax paid to federal government = $350,000 + $20,000 = $370,000 ($370K)
So, Answer is - a. $370K
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Sally is sole shareholder in TIP Technologies, Inc., a Ccorp.
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is considering incorporating the business. Pertinent financial data
are as follows:
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Ashley runs a small business that makes snow skis. She expects
the business to grow substantially over the next three years.
Because she is concerned about product liability and is planning to
take the company public in year 2, she currently is considering
incorporating the business. Pertinent financial data are as
follows:
Year 1
Year 2
Year 3
Sales revenue
$150,000
$320,000
$600,000
Tax-free interest income
5,000
8,000
15,000
Deductible cash expenses
30,000
58,000
95,000
Tax depreciation
25,000
20,000
40,000...
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Ashley runs a small business in Boulder, Colorado, that makes
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is considering incorporating the business. Pertinent financial data
are as follows:
Year 1
Year 2
Year 3
Sales revenue
$150,000
$320,000
$600,000
Tax-free interest income
5,000
8,000
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