Question

You are a shareholder in an S corporation. The corporation earns $2.02 per share before taxes. As a pass through entity, you will receive $2.02 for each share that you own. Your marginal tax rate is 25%. How much per share is left for you after all taxes are paid? Amount that remains is r share. (Round to the nearest cent.)

Answer 1

Solution:
	Amount that remain is $1.52 per share
Working Notes:
	Amount that remains = Amount received per share - (Amount received per share X tax rate)
	Amount that remains = $2.02 - ($2.02 X 25%)
	Amount that remains = $2.02 - 0.505
	Amount that remains = $1.515
	Amount that remains = $1.52
Notes:	Amount remain will the amount earn net of taxes paid.
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