ulz Required Information The following information applies to the questions disp

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ulz Required Information The following information applies to the questions displayed below Jabar Corporation, a C corporation, projects that it will have taxable Income of $320,000 before incuring any lease expenses. Jabars tax rate Iis 35 percent Abdul, Jabar's sole shareholder, has a marginal tax rate of 396 percent on ordinary Income and 20 porcent on dividend income. Jabar always distributes all of its after-tax earnings to Abdul Input al answers as positive numbers. Do no round any Intermedlate percentages. Round your answers to the nearest whole dollar amount. Leave no answer blank. Enter zero If applicable.) a. What is the amount of the overall tax (corporate level- shareholder level) on Jabar Corp's $320.000 pre-lease expense income it Jabar Corp, does not lease propery rom Abdul and it distributes al of ts after-tax earnings to its sole shareholder Abdul (include the net investment income tax in your calculations)? Taxable income before wase paymant e paymen Taxable income Ensity tax Ahee-aaxs entity earnings Abdu's tax on dividends Overal tax Prev 19 20 21 26 ENext Type here to search

Explanation / Answer

Particulars No Lease Payment $32000 Lease Payment $27000 Lease Payment 1) Taxable Income before Lease Payment   $320000 $320000 $320000 2) Lease Payment $0 ($32000) ($27000) 3) Taxable Income (1 - 2) $320000 $288000 $293000 4) Entity Tax (3 * 35%) ($112000) ($100800) ($102550) 5) After tax entity earnings (3-4) 208000 $187200 $190450 6) Abdul's Tax on Dividends(5*20%) $41600 $37440 $38090 7) Abdul's Tax on Lease Payment (2*39.6%) $0 $12672 $10692 Overall Tax (4+6+7) $153600    $150912 $151332

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