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5 poll . QUESTION 44 Clos Calculate the tax bability of a corporation and a partnership earning operating income of $5000000,
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Answer #1

yes there will be tax advantage

corporate tax already paid = 35%

Tax on personal income = 30%

Calculation of Tax advantage : -

= Operating income*Difference in tax rate

= $5000000*(35% - 30%)

= $5000000*5%

Hence, the tax advantage will be = $250,000

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