Answer:
a. Kristen's taxable income = $148,000
her tax liability:
($38,700 - $9,525) x 12% = $3,501
($82,500 - $38,701) x 22% = $9,635.78
($148,000 - $82,501) x 24% = $15,719.76
total = $28,856.54
Kristen's after tax income = $200,000 - $28,856.54 = $171,143.46
b. Purple's corporate tax liability = $200,000 x 21% = $42,000
Purple's after tax income = ($200,000 - $42,000) = $158,000
Kristen's taxable income is $146,000 (qualified dividends are included in AGI but taxed at different rate), her tax rate will be 15%. Kristen's after tax income = $158,000 - ($146,000 x 15%) = $136,100
c. Kristen's tax liability on ordinary income ($158,000) = $28,376.54
Kristen's tax liability on qualified dividends = ($42,000 x 0.79) x 15% = $4,977
total tax liability = $33,353.54
Kristen's after tax income = $158,000 + $33,180 - $33,353.54 = $157,826.46