A business generates profits of $150,000.The owner currently has a 28% MTR.What is the total amount of taxes paid if the business is a regular corporation and $20,000 in dividends is distributed to its sold individual shareholder?
A)Corporate tax,$41,250; individual tax,$3,000
B)Corporate tax,$33,950; individual tax,$5,600
C)Corporate tax,$41,750; individual tax,$5,600
D)Corporate tax,$0; Individual tax,$42,000

Question

Quizplus · Accepted Answer

The correct answer is A because the corporate tax is $41,250 and the individual tax is $3,000.

A Business Generates Profits of $150,000