You Own 100 Shares of a Sub Chapter "S" Corporation

question 8

Multiple Choice

You own 100 shares of a Sub Chapter "S" corporation.The corporation earns $5.00 per share before taxes.Once the corporation has paid any corporate taxes that are due,it will distribute the rest of its earnings to its shareholders in the form of a dividend.If the corporate tax rate is 21% and your personal tax rate on (both dividend and non-dividend) income is 30%,then how much money is left for you after all taxes have been paid?

• A)$210
• B)$300
• C)$350
• D)$500

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Definitions:

Equipment

Tangible assets used in the operation of a business to perform specific tasks, not intended for sale in the ordinary course of business.

Machinery

A category of physical equipment used in the production or manufacturing process.

Indirect Expenses

Costs not directly linked to the production of goods or services, such as office supplies and utility costs.

Benefits Received

A principle that taxes or charges should be levied according to the benefits a taxpayer receives from public expenditures or services.