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Jerry would like to organize FBC as either an LLC or 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. How much would Jerry keep after taxes if FBC is organized as either an LLC or as a C corporation? (ignore self-employment taxes)
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 C corporation?
Passionate Kiss
A deep and intense kiss that expresses romantic desire and emotional warmth between partners.
Excited
A state of being energetically aroused or stimulated, either emotionally or physically.
Classical Conditioning
The educational process of repeatedly pairing two stimuli, where initially the second stimulus elicits a response that eventually is elicited by the first stimulus alone.
Neutral Stimulus
A stimulus that initially produces no specific response other than focusing attention, until it is associated with an unconditioned stimulus in classical conditioning.
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