Introduction to Corporate Finance, Finance, Other Engineering

Calculatethe tax disadvantage to organizing a U.S. business today, after passage of the Jobs and growth Tax relief reconciliation act of 2003, as a corporation versus a partnership under the following conditions. Assume that all earnings will be paid out as cash dividends. Operating income will be $500,000 per year under either organizational form; the effective corporate profits tax rate is 35 percent (T = 0.35); the average personal tax rate for the partners of the business is also 35 percent (T = 0.35); and the capital gains tax rate on dividend income is 15 percent (T = 0.15). Then, recalculate the tax disadvantage using the same income but with the maximum tax rates that existed before 2003. These rates were 35 percent (T=0.35) on corporate profits and 38.6 percent (T=0.386) on personal investment income.
Posted Date: 2/1/2012 10:36:14 AM | Location : United States







Related Discussions:- Introduction to Corporate Finance, Finance, Assignment Help, Ask Question on Introduction to Corporate Finance, Finance, Get Answer, Expert's Help, Introduction to Corporate Finance, Finance Discussions

Write discussion on Introduction to Corporate Finance, Finance
Your posts are moderated
Related Questions
Lift and drag are merely the resolved components in specific directions of a resultant aerodynamic force caused by the relative velocity V of the vehicle through the air. If al

How do you find initial monthly payment for the second year after an adjustable-rate mortgage?


hysteresis loss least epends on


Derive the functional relationship between the no-arbitrage values of the two vertical spreads.

Why do only plant cell have totipotency?

seasoning of timber

Speed control in Aircraft Engine: Because the APU is designed to run at a constant rpm, some means must be provided to control this speed. Such a control device is known as a

The closed form solutions for ?max and Mmax are given on page 16.1-276 for several axial loads. Figure C-C2.2 summarizes the results for the first benchmark problem and Figure C-C2