A Business Generates Profit of $100,000

question 86

Multiple Choice

A business generates profit of $100,000. The owner has a 35% marginal tax rate. What amount of corporate and individual income tax will be paid on this profit if the business is an S corporation and no income is distributed?

• A) Corporate tax, $22,250; individual tax, $35,000
• B) Corporate tax, $22,250; individual tax, $0
• C) Corporate tax, $0; individual tax, $35,000
• D) Corporate tax, $22,250; individual tax, $27,213

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Definitions:

Decay

The gradual degradation or loss of information, matter, or quality over time, often used in the context of memory.

Encoding-Specificity Principle

The Encoding-Specificity Principle suggests that memory recall is most effective when information available at the time of recall is similar to the information present at the time of encoding.

Subjective

Relating to experiences, perspectives, or perceptions that are influenced by personal feelings, tastes, or opinions.

Objective

Pertains to observations or measures that are not influenced by the observer's feelings, interpretations, or prejudice, and thus considered unbiased.