Jerry Would Like to Organize FBC as Either an LLC

question 16

Essay

Jerry would like to organize FBC as either an LLC or as a corporation (taxed as a C corporation)generating an 8 percent annual before-tax rate of return on a $400,000 investment.Individual and corporate tax rates are both 35 percent and individual capital gains and dividends tax rates are 15 percent.FBC will pay out its after-tax earnings every year to either its members or its shareholders.
a.Ignoring self-employment taxes,how much would Jerry keep after taxes if FBC 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 owner and entity level)tax rates if FBC is organized as either an LLC or as a corporation (taxed as a C corporation)?

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Definitions:

Comprehensive Metabolic Panel

A blood test that measures your sugar (glucose) level, electrolyte and fluid balance, kidney function, and liver function.

Quantitative Glucose Test

A diagnostic test that measures the precise amount of glucose in a person's blood.

Fraudulent Coding

Involves incorrect or deceptive medical coding practices intended to unjustly increase reimbursement from healthcare payers.

Code Linkage

Analysis of the connection between diagnostic and procedural information in order to evaluate the medical necessity of the reported charges. This analysis is performed by insurance company representatives.