Taylor Would Like to Organize DRK as Either an LLC

question 59

Essay

Taylor would like to organize DRK as either an LLC or as a C corporation generating a 13 percent annual before-tax rate of return on a $250,000 investment. Individual and corporate tax rates are both 30 percent and individual capital gains and dividends tax rates are 5 percent. DRK will distribute its earnings annually to either its members or shareholders.
a. Ignoring self-employment taxes, how much would Taylor keep after taxes if DRK is organized as either an LLC or as a C corporation?
b. Ignoring self-employment taxes, what are the overall (combined owner and entity level) tax rates if DRK is organized as either an LLC or as a C corporation?

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Definitions:

Northwest-Corner Method

A technique used in transportation and logistics to find an initial feasible solution for the Transportation Problem by starting at the northwest corner of a cost matrix and moving south and east to allocate shipments.

Source A

A specific origin from which materials, services, or information are obtained.

Source B

This does not appear to represent a standard key term within common academic or technical contexts. Therefore, NO.

Capacity

The maximum amount that something can contain or produce, often used in reference to production and manufacturing facilities, systems, and services.