Sally is sole shareholder in TIP Technologies, Inc., a Ccorp. TIP Tech makes $1,000,000 in profit. It decides to re-invest most of it into growing the business but pays Sally a distribution of $100,000. How much total tax is paid to the federal government? (Assume corporate tax rate is 35% and individual rate is 20%.)
a. $350k c. $370k b. $200k d. $550k
Corporate Tax = $1,000,000*35% = $350,000
Individual Tax = $100,000*20% = $20,000
Total tax paid to federal government = $350,000 + $20,000 = $370,000 ($370K)
So, Answer is - a. $370K
Sally is sole shareholder in TIP Technologies, Inc., a Ccorp. TIP Tech makes $1,000,000 in profit....
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