Emmy Would Like to Organize PRK as Either an LLC

question 31

Essay

Emmy would like to organize PRK as either an LLC or as a corporation (taxed as a C corporation)generating a 15 percent annual before-tax rate of return on a $100,000 investment.Individual ordinary rates are 25 percent,corporate rates are 15 percent,and individual capital gains and dividends tax rates are 5 percent.PRK will distribute its earnings annually to either its members or shareholders.
a.Ignoring self-employment taxes,how much would Emmy keep after taxes if PRK is organized as either an LLC or as a corporation (taxed as a C corporation)?
b.Ignoring self-employment taxes,what are the overall tax rates (combined entity and owner level)if PRK is organized as either an LLC or a corporation (taxed as a C corporation)?

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Definitions:

Electrical Charge

A fundamental property of matter that leads to electromagnetic force between objects. The charge can be positive or negative and is measured in coulombs.

Electrons

Negatively charged subatomic particles that orbit the nucleus of an atom.

Microelectrodes

Small electrodes used to record electrical activity or deliver electrical stimulation in biological tissue.

Giant Axons

Unusually large nerve fibers that facilitate rapid transmission of electrical impulses, especially notable in specific animal species.