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%.

---

Definitions:

Curriculum Changes

Adjustments or revisions made to the content, structure, or delivery of educational materials and courses.

Polyamory

The state of being in love, or romantically involved with, more than one person at the same time.

Polygamy

The practice of being married to 2 or more people at one time.

Polyandry

A form of marriage in which a woman has two or more husbands at the same time.