Doris Is Going to Invest $90,000 in a Business Entity

question 7

Essay

Doris is going to invest $90,000 in a business entity. She will manage the business entity. Her projected share of the loss for the first year is $36,000. Doris' marginal tax rate is 33%. Determine the cash flow benefit of the loss to Doris if the business form is:
a.A general partnership.
b.An S corporation.
c.An LLC.
d.A C corporation.

---

Definitions:

Brazilian Ethanol

Ethanol fuel produced in Brazil, primarily from sugarcane, used as a biofuel alternative to gasoline.

Consumer Surplus

The difference between the maximum price consumers are willing to pay for a product and the actual price they pay, reflecting consumer gain.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus what they actually receive.

Japanese Imports

Goods or services brought into another country from Japan for commercial purposes or consumption.