After tax cash flow LLC 61185 C corporation 61402 LLC Description C corp

After tax cash flow llc 61185 c corporation 61402 llc

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After-tax cash flow LLC $61,185 C corporation $61,402 LLC Description C corp. Description (1) Pretax earnings $102,000 15% × $680,000 $102,000 15% × $680,000 (2) Entity level tax rate 0% 21% (3) Entity level tax 0 21,420 (1) × (2) (4) Earnings after- entity-level tax $102,000 (1) – (3) $ 80,580 (1) – (3) (5) QBI deduction 0 Does not qualify NA (6) Deduction for 50 percent of SE tax (1,366) (1) × 0.9235 × 0.029 × 0.5 NA (7) Net income taxable to owner 100,634 (4) + (5) + (6) 80,580 (4) × 100% distributed as dividend (8) Income tax paid by owner $ 37,235 (7) × 0.37 $ 16,116 (7) × 0.20 (9) Self-employment tax 2,732 (1) × 0.9235 × 0.029 NA (10)Additional Medicare tax/Net investment income tax 848 (1) × 0.9235 × 0.009 additional Medicare tax 3,062 (7) × 0.038 net investment income tax (11)Owner-level tax $40,815 (8) + (9) + (10) $19,178 (8) + (10) After-tax cash flow $61,185 (1) – (11) $61,402 (7) – (11) 16- Mickey, Mickayla, and Taylor are starting a new business (MMT). To get the business started, Mickey is contributing $215,000 for a 40 percent ownership interest, Mickayla is
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contributing a building with a value of $215,000 and a tax basis of $153,750 for a 40 percent ownership interest, and Taylor is contributing legal services for a 20 percent ownership interest. What amount of gain is each owner required to recognize under each of the following alternative situations? [ Hint : Look at §351 and §721.] (Leave no answer blank. Enter zero if applicable.) rev: 02_22_2020_QC_CS-201869 a. MMT is formed as a C corporation. Gain to be recognized by: Mickey 0 Mickayla 0 Taylor $107,500 Taylor = 215000/40% = 537500 X 20% = 107500 a. Under §351, Mickey and Mickayla do not recognize any gain. However, because Taylor is contributing services (and services are not property) Taylor must recognize $107,500 of ordinary income on the receipt of the $107,500 worth of stock she receives from MMT ($215,000 + $215,000 = $430,000 ÷ 80% = $537,500 x 20% = $107,500). 17- LNS Corporation reports revenues of $2,210,000. Included in the $2,210,000 is $30,500 of tax-exempt interest income. LNS reports $1,372,500 in ordinary and necessary business expenses. What is LNS corporation’s taxable income for the year? Taxable income $807,000 Statement showing taxable income Particulars Amount Book Income 2,210,000 Business Expenses(Assuming same has not been deducted from above) 1,372,500 Net income 837,500 Less Tax Exempt interest income 30,500 Taxable Income 80,7000 $807,000, computed as follows:
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Description Amount Explanation (1)Total revenue $ 2,210,000 (2)Tax-exempt interest income (30,500) (3)Deductions (1,372,500) Taxable income $ 807,000 (1) + (2) + (3) 18- On October 1 of year 1, Riverside Corp. (RC), a calendar-year taxpayer, acquired the assets of another business in a taxable acquisition. When the purchase price was allocated to the assets purchased, RC determined it had purchased $1,710,000 of goodwill for both book and tax purposes. At the end of year 1, RC determined that the goodwill had not been impaired during the year. In year 2, however, RC concluded that $670,000 of the goodwill had been impaired and wrote down the goodwill by $670,000 for book purposes. Required: a. What book–tax difference associated with its goodwill should RC report in year 1? Is it favorable or unfavorable? Is it permanent or temporary?
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