Hello. I need help trying to figure out this problem. The answer to this problem is D. 19,920 but can you please explain why that's the correct answer? I would appreciate it. Logan, a 50-percent shareholder in Military Gear Incorporated (MG), is comparing the tax consequences of losses from C corporations with losses from S corporations. Assume MG has a $116,000 tax loss for the year, Logan's tax basis in his MG stock was $158,000 at the beginning of the year, and he received $83,000 ordinary income from other sources during the year. Assuming Logan's marginal tax rate is 24 percent, how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation? A) $0 B) 6,000 C) 13,920 D) 19,920

Hello. I need help trying to figure out this problem. The answer to this problem is D. 19,920 but can you please explain why that's the correct answer? I would appreciate it. Logan, a 50-percent shareholder in Military Gear Incorporated (MG), is comparing the tax consequences of losses from C corporations with losses from S corporations. Assume MG has a $116,000 tax loss for the year, Logan's tax basis in his MG stock was $158,000 at the beginning of the year, and he received $83,000 ordinary income from other sources during the year. Assuming Logan's marginal tax rate is 24 percent, how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation? A) $0 B) 6,000 C) 13,920 D) 19,920

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter20: Corporations And Parterships

Section: Chapter Questions

Problem 35P

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Hello. I need help trying to figure out this problem. The answer to this problem is D. 19,920 but can you please explain why that's the correct answer? I would appreciate it. Logan, a 50-percent shareholder in Military Gear Incorporated (MG), is comparing the tax consequences of losses from C corporations with losses from S corporations. Assume MG has a $116,000 tax loss for the year, Logan's tax basis in his MG stock was $158,000 at the beginning of the year, and he received $83,000 ordinary income from other sources during the year. Assuming Logan's marginal tax rate is 24 percent, how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation? A) $0 B) 6,000 C) 13,920 D) 19,920
Logan, a 50-percent shareholder in Military Gear Incorporated (MG), is comparing the tax consequences of losses from C corporations with losses from S corporations. Assume MG has a $118,000 tax loss for the year, Logan's tax basis in his MG stock was $159,000 at the beginning of the year, and he received $84,000 ordinary income from other sources during the year. Assuming Logan's marginal tax rate is 24 percent, how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation? Multiple Choice O O о $0 6,000 20,160 14,160
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