Homework Answers
Answer -
| Calculation | Tax on long-term capital gain | ||
| (a) | If Lemon is an LLC : The tax on the $70000 long-term capital gain | $70000 * 20% | $14000 |
| (b) | If Lemon is a C corporation : The tax on the $70000 long-term capital gain | $70000 * 21% | $14700 |
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Problem 3-37(10. 1,3) Jonathan owns 100% of Lemon Company a calendar year entity. In the current...
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Problem 3-37 (LO. 1, 3) Jonathan owns 100% of Lemon Company (a calendar year entity). In the current year, Lemon recognizes a long-term capital gain of $70,000 and no other income (or loss). Jonathan is in the 37% tax bracket (and 20% tax bracket for any net capital gains or dividends) and has no recognized capital gains (or losses) before considering his ownership interest in Lemon Company. What is the income tax result from the $70,000 if Lemon is (a)...
Problem 3-38 (LO. 1,3) In the current year, Tanager Corporation (a calendar year corporation) had operating income of $480,000 and operating expenses of $390,000. In addition, Tanager had a long-term capital gain of $55.000 and a short term capital loss of $40.000 a. Compute Tanager's taxable income and tax for the year. Taxable income: 105,000 Income tax: b. Assume the same facts except that Tanager's long-term capital gain was $15.000. Compute Tanager's taxable income and tax for the Taxable income:...
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Catherine is the sole stockholder of Cat Co., a calendar-year C corporation. The corporation has a business need for a tract of land that Catherine owns personally. The plan is for the corporation to use the land for eighteen months from March 1, 2020 through August 31, 2021. The fair market value of the land is $500,000. Catherine's basis in the land is $100,000. She has held the land as an investment for the last five years. Catherine is considering...
. T-Mobile 4:25 PM 453% Aa 10 a 3. After reading this chapter, it isn't sur- prising that you're becoming an in- vestment wizard. With your new- found expertise, you purchase 100 shares of KSU Corporation for $37 per share. Assume the price goes up to $45 per share over the next 12 months and you receive a qualified dividend of $0.50 per share. What would be your total return on your KSU Corporation investment? As- suming you continue to...
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