Compute the first level of tax on snl taxable income

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SNL corporation, a C corporation, reports $400,000 of taxable income in the current year. SNL's tax rate is 35 percent. Answer the following questions, assuming Keegan, SNL's sole shareholder, has a marginal tax rate of 28 percent on ordinary income and 15 percent on dividend income.

a. Compute the first level of tax on SNL's taxable income for the year.

b. Compute the second level of tax on SNL's income assuming that SNL currently distributes all of its after-tax earnings to Keegan. What is the overall corporate (double) tax rate on SNL's taxable income for the year?

Reference no: EM13134220

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