Essay
Taylor would like to organize DRK as either an LLC or as a corporation (taxed as a C corporation)generating a 13 percent annual before-tax rate of return on a $250,000 investment.Individual and corporate tax rates are both 30 percent and individual capital gains and dividends tax rates are 5 percent.DRK will distribute its earnings annually to either its members or shareholders.
a.Ignoring self-employment taxes,how much would Taylor keep after taxes if DRK is organized as either an LLC or as a corporation (taxed as a C corporation)?
b.Ignoring self-employment taxes,what are the overall (combined owner and entity level)tax rates if DRK is organized as either an LLC or as a corporation (taxed as a C corporation)?
Correct Answer:

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Correct Answer:
Verified
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