Artco Inc.is a C corporation.This year it earned $50,000 of taxable income and paid a $10,000 distribution (dividend)to Lily,its sole shareholder.Lily has a marginal tax rate of 24%.Due to the corporation's results and the distribution paid,the IRS will receive total taxes of

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Artco Inc. will pay $12,000 in corporate income tax (21% x $50,000). Lily will pay $2,900 in personal income tax (24% x $10,000 dividend). The total tax paid is $12,000 + $2,900 = $12,900.

Artco IncIs a C Corporation