Stacy Would Like to Have SST (A Business Entity)organized as Either

question 32

Essay

Stacy would like to have SST (a business entity)organized as either an LLC (taxed as a partnership)or as a corporation (taxed as a C corporation)generating a 10 percent annual before-tax return on a $600,000 investment.Stacy's marginal tax rate on ordinary income is 37 percent.Stacy's marginal tax rate on individual capital gains and dividends is 23.8 percent, including the net investment income tax.SST will pay out its after-tax earnings every year to either its members or its shareholders.If SST is taxed as a partnership, Stacy would be subject to a 2.9 percent self-employment tax rate and a .9 percent additional Medicare tax.Assume that SST's income is not qualified business income for purposes of the qualified business income deduction.How much would Stacy have after taxes if SST is organized as either an LLC or a C corporation?

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Definitions:

Settling Point

The Settling Point is a conjectured equilibrium in which factors such as metabolism, appetite, and physical activity balance out to determine one's body weight.

Nutrition

The science that interprets the nutrients and other substances in food in relation to maintenance, growth, reproduction, health, and disease of an organism.

Metabolic Rates

The rate at which the body burns calories to sustain basic life functions.

Neophobia

A fear of anything new, including new experiences, foods, or situations.