Homework Answers
Answer for a)
sales= 1600000
expences= 1100000
profit =1600000-1100000=500000
CORPORATION TAX @20% =500000*20/100=100000
Share of Mark = 100000*40/100=40000
Therefore Mark's taxable income is 40000+450000=490000
Marks personal tax is
Upto 2.5 lakh NILL
above 2.5 240000*10/100=24000
Mark's personal tax return =24000
Answer for b)
sales= 1600000
expences= 1100000
book profit =1600000-1100000=500000
BOOK PROFIT AMOUNT DEDUCTIBLE u/s 40B
ABOVE 3 LAKH 60% OF BOOK PROFIT
Therefore taxable income is 500000*60/100= 300000
hence share of Mark is 300000*40/100=120000
Therefore Mark's taxable income is 120000+450000=570000
TAX SLAB TAX RATE
Upto 2.5 lakh NILL
2.5 TO 5 LAKH 10%
ABOVE 20%
Marks personal tax is
Upto 2.5 lakh NILL
2.5 250000*10/100=25000
70000(570000-500000) 70000*20/100=14000
Mark's personal tax return =25000+14000=39000
Answer for c)
LLC stands for Limited liability company. It is not a taxing entity and it is not recognized by IRS . The IRS says LLC may be taxed as a partnership firm. Hence calculation of tax return is same as partnership firm.
Answer for d )
Since taxable income is less than 1000000 , Marks tax return is not affected.
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