Janine and Johnny are single taxpayers who own the Queen's Inn Tavern.Janine owns 70% and Johnny owns 30% of Crossbow.Janine receives a payment of $40,000 and Johnny receives a payment of $60,000.Crossbow's taxable income is $200,000 before considering the payments to Janine and Johnny.Janine's net taxable income from other sources is $30,000 and Johnny's net taxable income from other sources is $10,000.Determine the total income tax liability for each of the following entity forms.
a.Queen's Inn Tavern is organized as a partnership.The payments are guaranteed payments.

b.Queen's Inn Tavern is organized as a corporation.The payments are salaries.

Question

Janine and Johnny are single taxpayers who own the Queen's Inn Tavern.Janine owns 70% and Johnny owns 30% of Crossbow.Janine receives a payment of $40,000 and Johnny receives a payment of $60,000.Crossbow's taxable income is $200,000 before considering the payments to Janine and Johnny.Janine's net taxable income from other sources is $30,000 and Johnny's net taxable income from other sources is $10,000.Determine the total income tax liability for each of the following entity forms.
a.Queen's Inn Tavern is organized as a partnership.The payments are guaranteed payments.
 
b.Queen's Inn Tavern is organized as a corporation.The payments are salaries.

Quizplus · Accepted Answer

The Answer of Janine and Johnny are single taxpayers who own the Queen's Inn Tavern.Janine owns 70% and Johnny owns 30% of Crossbow.Janine receives a payment of $40,000 and Johnny receives a payment of $60,000.Crossbow's taxable income is $200,000 before considering the payments to Janine and Johnny.Janine's net taxable income from other sources is $30,000 and Johnny's net taxable income from other sources is $10,000.Determine the total income tax liability for each of the following entity forms.
a.Queen's Inn Tavern is organized as a partnership.The payments are guaranteed payments.
 
b.Queen's Inn Tavern is organized as a corporation.The payments are salaries.

Janine and Johnny Are Single Taxpayers Who Own the Queen's