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Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is in the 21% bracket. Because Aleshia's contribution to Rovers profit is substantial, Rover believes that a $130,800 bonus in the current year is reasonable compensation and should be deductible in full. However, Rover is considering paying Aleshia a $130,800 dividend because Aleshias tax rate on dividends is lower than the corporate tax rate on compensation.

Answer the following questions to determine whether Rover is correct in believing that a dividend is the better choice.

a. Regarding taxes, which would benefit Aleshia the most? The $130,800 because after taxes she would have $fill in the blank 2 from the dividend and $fill in the blank 3 from the bonus.

b. Regarding taxes, which would benefit Rover Corporation the most? The $130,800 dividend because it would save Rover $fill in the blank 5 in taxes.

c. Considering the two parties together, which alternative would provide the most overall tax savings? The $130,800 because when the overall effect to both the corporation and the shareholder are considered the net tax

rectly and indirectly) fill

Emily spent $171,200 to rehabilitate a certified historic building (adjusted basis of $111,280) that originally had been placed in service in 1935.

What is Emily's rehabilitation expenditures tax credit?

in the blank 1 shares in Rose Corporation.

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