Crocker and Company (CC) Is a C Corporation

question 59

Multiple Choice

Crocker and Company (CC) is a C corporation. For the year, CC reported taxable income of $566,500. At the end of the year, CC distributed all its after-tax earnings to Jimmy, the company's sole shareholder. Jimmy's marginal ordinary tax rate is 37 percent and his marginal tax rate on dividends is 23.8 percent, including the net investment income tax. What is the overall tax rate on Crocker and Company's pretax income?

• A) 18.8%.
• B) 23.8%.
• C) 21%.
• D) 39.8%.
• E) 44.8%.

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Definitions:

Subcontracting

The process of assigning specific portions of work or projects to external parties or businesses.

Short-term Production

The process of manufacturing goods or services over a relatively brief period, focusing on immediate output and efficiency.

Broad Blueprint

A comprehensive plan or strategy outlining the main components and goals of a project or initiative.

Aggregate Planning

The process of developing, analyzing, and maintaining a preliminary, approximate schedule of the overall operations of an organization.