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How much is left for you after all taxes are paid for C Corporation/S Corporation?

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6. You are a shareholder in a C corporation. The corporation earns $2.00 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal tax rate on (both dividend and non -dividend) income is 30%. How much is left for you after all taxes are paid?

7. Repeat the problem assuming the corporation is an S corporation.

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Solution Summary

The solution explains how to calculate the amount of income left with the shareholders under C and S Corporations.

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6. You are a shareholder in a C corporation. The corporation earns $2.00 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal ...

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