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yawa3891 [41]
3 years ago
9

Logan, a 50% shareholder in Military Gear Incorporated (MG), is comparing the tax consequences of losses from C corporations wit

h losses from S corporations. Assume MG has a $100,000 tax loss for the year, Logan's tax basis in his MG stock was $150,000 at the beginning of the year, and he received $75,000 ordinary income from other sources during the year. Assuming Logan's marginal tax rate is 24 percent, how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation?
Business
1 answer:
polet [3.4K]3 years ago
5 0

Answer:

$12,000

Explanation:

Calculation for how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation

First step is to calculate the amount he will pay for the taxes if Military Gear Inc. is a C corporation

Tax amount=($75,000 × 24%)

Tax amount=$18,000

Second step is to calculate the amount he will pay for the taxes if Military Gear Inc. is a S corporation

Tax amount=($75,000 -$50,000)*24%

Tax amount=$25,000*24%

Tax amount=$6,000

Now let calculate how much more tax will Logan pay currently

Tax amount=$18,000-$6,000

Tax amount=$12,000

Therefore how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation will be $12,000

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Answer:

Framing effects.

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In the given scenario, Josh's decision to have tiramisu only when others are having dessert and not if he would be the only one having dessert is affected by the framing effect. This is because his decision is influenced by the way others behave rather than his desire to eat even his favorite dessert.

Thus, the correct answer is the framing effect.

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5. A firm that has been in business for less than one year must file advertisements with
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A company that has been in business for much less than twelve months ought to file advertisements with FINRA/10.

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4 0
1 year ago
The difference between a standard and a budget is that:________.
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3 years ago
Liam is considering putting money in an investment plan that will pay him $52,000 in 12 years. If Liam’s opportunity cost rate i
Margarita [4]

Answer:

a) The Maximum Liam should be willing to pay is $23,089

Explanation:

The maximum amount Liam should be willing to pay for the investment is the present value of the future amount of 52,000  discounted at 7%.

The present value of a future sum is its worth in today's terms.This represents how much Liam should be offered now to make him  indifferent about the choice of receiving $52,000 in the future.

For example, It is the amount that should be invested today at 7% to become $52,000 in 12 years time.

The present value (PV) of a future sum (FV) can be ascertained using the formula below:

PV = FV × (1+r)^(-n)

PV = 52,000× (1+0.07)^(-12)

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The Maximum Liam should be willing to pay is $23,089

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3 years ago
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