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How did the TCJA alter the relative preferences in terms of organizational form? Illustrate this using...

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Accounting

How did the TCJA alter the relative preferences in terms oforganizational form? Illustrate this using a simple example where abusiness has pretax taxable income of $100 and operates:

a. A C corporation subject to a 21% tax rate, that pays out allafter-tax earnings as dividends, and in which the shareholders areall taxable at 20% on qualified dividends and 37% on ordinaryincome

b. A pass-through that does not qualify for the QBIdeduction

c. A pass-through that does qualify for the QBI deductionTax-Planning Problems

Answer & Explanation Solved by verified expert
4.3 Ratings (629 Votes)
shareholder pay tax 20 on qualified dividened and tax 37 on ordinary income before tcja the maximum combined effective federal income tax rate in this situation is as follows 352037510035 5040 but after tcja max combiend    See Answer
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