Seved Required Information The following information applies to the questions di

Question

Seved Required Information The following information applies to the questions displayed below Andrea would like to organize SHO as elther an LLC or as a C corporation generating an 12 percent annual before-tax return on a $230,000 Investment. Assume Individual and corporate tax rates are both 35 percent and Individual captal as a C corporation. Assume Andrea is th e sole owner of the entity Ignore self-emplayment taxes, the additional Medicare tax, and the net investment income tax. a. How much would Andrea keep after taxes if SHO Iis organtzed as elther an LLC or as a C corporaton? LLC 26E Next> ype here to search

Explanation / Answer

a) After Tax Earning :-

Particulars LLC C Corp. Pretax Earnings ($230000*12%)= $27600 ($230000*12%)= $27600 Less : Entity Level Tax $0 ($27600*35%)= ($9660) After Tax Entity Earnings $27600 $17940 Less : Owner Tax ($27600*35%)= ($9660) ($17940*15%)= ($2691) After Tax Earnings $17940 $15249

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