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Jose, who is in the 35 percent marginal tax bracket with a 15 percent tax...

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Accounting

Jose, who is in the 35 percent marginal tax bracket with a 15 percent tax rate on dividends, owns 100 percent of the stock of JJ Incorporated. This year, JJ generates $473,000 taxable income and pays a $94,600 dividend to Jose. Compute his tax on the dividend assuming the federal tax rules currently in effect apply to the dividend payment. Also compute his tax on the dividend assuming the federal tax system has been amended to allow shareholders to gross up dividend income by the corporate tax paid with respect to the dividend and credit this tax against their individual tax.

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